LETTERS 


THE    PRESIDENT, 


FOREIGN  AND  DOMESTIC  POLICY 


THE   UNION, 


ITS    EFFECTS, 


AS    EXHIBITED    IN    THE 

CONDITION  OF  THE  PEOPLE  AND  THE  STATE. 

BY 

H.    C.    CAREY. 


PHILADELPHIA: 
J.    B.    LIPPINCOTT    &    GO. 

LONDON:  — TRUBNER   &   CO. 

PARIS:  —  GUILLAUMIN  &  CO. 

1858. 

. 


F 


CONTENTS. 


PAGE 

LETTER  I.  —  Historical  sketch  of  the  Union,  from  the  peace  of  1783,  to 

the  present  time 3 

II.  —  Of  banking,  in  the  Union,  for  the  half  century  which  fol- 
lowed the  peace  of  1783 8 

III.—  Of  banking,  in  the  last  five-and-twenty  years 13 

IV.  — Phenomena  offered  for  consideration,  by  the  Union,  at  the 

present  time , 18 

V.  —  Evidences  of  material,  moral,  and  political  deterioration..    24 
VI.  — Phenomena  of  advancing  and  declining  civilization 81 

VII.  —  Growing  dependence  of  the  American  farmer  on  the  dis- 
tant market —  its  effects 35 

VIII.  —  Growing  dependence  of  the  planter 40 

IX.  —  Decline  in  the  power  of  the  products  of  the  earth,  to  com- 
mand finished  commodities  in  exchange 45 

X.  —  Waste  of  power,  throughout  the  Union,  and  consequent 

exhaustion  of  the  soil 50 

XI.  —  Decline  in  the  power  to  maintain  commerce 67 

XII.  —  The  sort  of  free  trade  that  is  really  required 63 

XIII.  —  Policy  of  the  Federal  government  in  reference  to  the  cur- 

rency       69 

XIV.  —  The  precious  metals  the  great  instruments  of  association,     74 

XV.  —  Those  metals  go  from  the  countries  that  have  little  com- 
merce, to  those,  in  which  employments  are  diversi- 
fied, and  in  which  commerce  is  great 79 


iv  CONTENTS. 

LETTER  XVI.  —  Influence  of  banks,  and  bank  notes,  on  the  supply  of 

the  precious  metals 87 

XVII.  —  How  the  policy  of  the  Union  affects  the  shipping  in- 
terest      94 

XVIII. — Increasing  difficulty   of  obtaining  efficient  means   of 

transportation 99 

XIX. — Increasing  charge  for  the  use  of  money 105 

XX. — Causes  of  the  growing  difficulty  of  accumulation 113 

XXI. — Why  it  is,  that  protection  is  required 120 

XXII. — Of  the  British  system,  and  its  effects  upon  the  planters 

and  farmers  of  the  world 126 

XXIII.  —  Of  the  policy  of  France,  and  its  effects,  at  home  and 

abroad 131 

XXIV.  —  Commerce  grows  by  aid  of  the  French  system,  and  de- 

clines under  the  British  one 189 

XXV.  — Power  to  maintain  commerce  with  foreign  nations  grows 

with  the  growth  of  domestic  commerce 144 

XXVI. — Harmony  of  all  real  and  permanent  international  in- 
terests   148 

XXVII.  —  Decline,  throughout  the  Union,  in  the  power  to  main- 
tain the  local  institutions 153 

XXVIII.  —  Declining  power  to  contribute  to  the  revenue  of  the 

State 159 

XXIX.— Conclusion ..  166 


L  E  T  T  E  ES 


TO   THE 


PEESIDENT  OF  THE  UNITED  STATES. 


LETTER    FIRST. 


SIR  :  —  In  common  with  a  large  portion  of  our  fellow-citizens, 
I  have  looked  with  much  anxiety  for  the  appearance  of  your 
Message  —  hoping  for  some  suggestions  tending  towards  the 
relief  of  the  community,  from  the  accumulated  evils  under  which  it 
now  so  severely  suffers.  In  this,  however,  I  have  been  disappointed, 
having  found  therein,  only  the  assurance,  that,  while  the  govern- 
ment "cannot  fail  deeply  to  sympathize"  with  the  people  in  their 
distresses,  it  is  wholly  "without  the  power  to  extend  relief"  — 
the  cause  of  difficulty  being  to  be  found  in  the  vicious  action  of  the 
local  institutions,  which  are  beyond  the  reach  of  any  action 
of  the  central  government.  For  more  than  forty  years,  as  we  are 
here  assured,  the  history  of  the  country  has  been  one  of  ' '  extra- 
vagant expansions  in  the  business  of  the  country,  followed  by 
ruinous  contractions.  At  successive  intervals,"  as  you  continue  to 
say,  "  the  best  and  most  enterprising  men  have  been  tempted  to 
their  ruin  by  excessive  bank  loans  of  mere  paper  credit,  exciting 
them  to  extravagant  importations  of  foreign  goods,  wild  specula- 
tions, and  ruinous  and  demoralizing  stock-gambling.  When  the 
crisis  arrives,  as  arrive  it  must,  the  banks  can  extend  no  relief  to 
the  people.  In  a  vain  struggle  to  redeem  their  liabilities  in 
specie,  they  are  compelled  to  contract  their  loans  and  their  issues ; 
and,  at  last,  in  the  hour  of  distress,  when  their  assistance  is  most 
needed,  they  and  their  debtors  together  sink  into  insolvency." 

For  all  these  difficulties,  we  are,  as  you  have  here  informed 
your  constituents,  indebted  to  the  excess  of  power  in  the  States. 
"  The  framers  of  the  Constitution,"  in  your  opinion,  having  given 

(3) 


4  LETTERS   TO    THE 

"  to  Congress  the  power  '  to  coin  money  and  to  regulate  the  value 
thereof,'  and  prohibited  the  States  from  coining  money,  emitting 
bills  of  credit,  or  making  anything  but  gold  and  silver  coin  a 
tender  in  payment  of  debts,  supposed  they  had  protected  the 
people  against  the  evils  of  an  excessive  and  irredeemable  paper 
currency.  They  are  not,"  in  your  opinion,  to  be  held  "responsible 
for  the  existing  anomaly,  that  a  government  endowed  with  the 
sovereign  attribute  of  coining  money  and  regulating  the  value 
thereof,  should  have  no  power  to  prevent  others  from  driving  this 
coin  out  of  the  country,  and  filling  up  the  channels  of  circulation 
with  paper  which  does  not  represent  gold  and  silver." 

The  Constitution  having,  in  this  respect,  as  you  suppose,  proved 
a  total  failure,  the  remedy  is,  as  you  seem  to  think,  to  be  found 
in  increasing  the  power  of  the  Federal  government,  at  the  expense 
of  those  of  the  States.  Admitting  the  facts  to  be  precisely  as  you 
appear  to  think  them,  you  are  certainly  right,  and  the  sooner  we 
make  the  change,  the  better  will  it  be,  not  only  for  ourselves, 
but  for  the  world  at  large  —  so  frequently  disturbed  by  re- 
vulsions consequent,  as  it  would  seem,  upon  the  existence  of  our 
Federal  system.  Before,  however,  deciding,  that  the  fault  does 
really  lie  with  the  States  —  and,  still  more,  before  deciding  to 
make  a  change  in  that  direction,  it  would,  as  it  seems  to  me,  be 
well,  calmly  to  review  the  past  —  giving  the  facts  in  the  precise 
order  of  their  occurrence,  and  thus  enabling  our  fellow-citizens  to 
determine  for  themselves,  whether  the  difficulties  you  have  so  well 
described,  have  had  their  origin  in  the  excess  of  central,  or  of 
local,  action.  Such  an  examination  might  prove,  that  the  cause 
of  those  revulsions  lay  with  the  central  government;  and,  if  so, 
then,  any  motion  in  the  direction  you  have  indicated,  would  but 
augment  the  evils  under  which  we  suffer.  Firmly  believing  that 
such  would  be  its  result,  I  am  induced  to  address  to  you  this 
letter  —  doing  so,  in  the  full  confidence,  that  you  would  much 
rejoice  in  having  it  demonstrated,  that,  the  cause  of  error  not 
being  found  in  the  local  action,  we  might  safely  permit  the 
Constitution  to  remain  untouched  —  leaving  the  local  authorities 
to  continue  in  the  exercise  of  all  the  powers  not  expressly  parted 
with,  when  the  sovereign  States  united  in  the  formation  of  our 
present  Union.  —  It  being  the  tendency  of  power  to  steal  from  the 
hands  of  the  many  to  those  of  the  few,  "liberty,"  as  has  so  well 
been  said  by  one  of  your  illustrious  predecessors,  "  can  be  main- 
tained, only  at  the  price  of  eternal  vigilance  ; "  and  if,  by  reason 
of  failure  in  its  exercise,  we  should,  under  your  guidance,, make 
any  step  in  a  direction  adverse  to  freedom,  it  would  to  you,  I  am 
well  assured,  be  cause  of  great  and  permanent  regret.  Without 
apology,  therefore,  it  is,  that  I  ask  your  attention  to  the  following 
brief  summary  of  our  history,  in  the  past  half  century. 

From  1807  to  1815,  we  were,  in  a  great  degree,  driven  from 
the  ocean,  and  forced  to  look  homeward  for  our  commerce  — 


PRESIDENT   OF  THE   UNITED   STATES.  5 

non-intercourse  laws  having  followed  closely  on  the  heels  of  an 
embargo,  and  that,  in  its  turn,  having  been  succeeded  by  a  war 
with  England.  Manufactures  had,  of  course,  grown  rapidly  — 
making  a  market  at  home  for  all  the  products  of  the  earth, 
and  enabling  the  consumers  and  the  producers  to  take  their  places 
by  each  other's  side.  As  a  consequence  of  this  it  was,  that  after  the 
close  of  the  war,  there  existed,  throughout  the  country,  a  degree 
of  prosperity  such  as  had  never  before  been  known.  Farmers 
and  planters  were  rich,  for  the  prices  they  obtained  were  great. 
Mechanics  were  prosperous  —  their  services  being  everywhere  in 
demand.  The  revenue  was  large,  for  the  people  could  afford  to 
pay  for  the  products  of  foreign  lands.  The  government  was 
strong,  for  it  was  rapidly  diminishing  the  public  debt. 

Less  than  two  years  later,  however,  the  whole  was  changed — 
the  duties  on  imports  having  then  been  much  reduced,  and  ad 
valorem  duties,  to  a  considerable  extent,  substituted  for  those- 
which  had  been  specific.  The  consequences  of  this  speedily  exhi- 
bited themselves,  in  the  extensive  closing  of  manufacturing  esta- 
blishments—  in  the  creation  and  failure  of  numerous  banks  —  in 
the  decline  in  price,  of  all  the  products  of  the  farm  and  the  planta- 
tion, and  the  ruin  of  farmers  and  planters  —  in  the  diminished 
demand  for  labor  —  in  the  growth  of  pauperism  —  in  the  export 
of  specie  —  and  in  a  growing  public  debt.  Free  trade  had  found 
the  country,  in  1816,  in  a  state  of  high  prosperity,  but  it  left  it 
almost  ruined.  x 

With  the  year  1824,  there  came  a  partial  change,  followed,  in 
1828,  by  a  more  extensive  one  —  the  central  government  then 
changing  its  policy  from  a  free  trade  to  a  protective  one.  Here, 
again,  the  effects  were  speedily  seen,  in  the  revival  of  manufac- 
tures—  in  the  demand  for  the  products  of  the  earth  —  in  the 
import  of  specie — in  an  increase  of  the  public  revenue,  so  great 
as  to  require  the  emancipation  of  tea,  coffee,  and  other  com- 
modities, from  all  contribution  to  the  public  revenue  —  in  the  final 
extinction  of  the  public  debt — in  a  general  prosperity,  public  and 
private  —  and  in  a  feeling,  throughout  the  community,  of  strength 
and  power,  far  exceeding  even  that  which  followed  the  return  of 
peace,  in  1815.  That  prosperity,  however,  was  a  quiet  and 
tranquil  one  —  there  having  been  but  little  speculation,  and, 
therefore,  little  tendency  towards  the  creation  of  unnecessary 
banks.  The  few  that  had  been  created,  had  found  their  places  in 
the  Eastern  States.  The  total  number  in  1830,  was  but  321, 
against  307  that  had  existed  ten  years  previously ;  and  the  increase 
in  the  amount  of  capital,  was  but  $3,000,000  — the  $107,000,000 
of  1820,  being  represented  in  1830,  by  $110,000,000. 

Again,  however,  in  1834,  the  system  of  the  central  government 
was  changed — provision  having  been  made  in  1833  for  the  gradual 
passage  fron^a  protective  to  a  merely  revenue  tariff,  the  last  stage 
of  which  was  to  be  reached  in  1842.  Numerous  banks  were  now 


6  LETTERS    TO    THE 

again  created  ;  enormous  foreign  debts  were  incurred  ;  and  the 
result  was  seen,  in  the  insolvency  of  the  banks  —  the  ruin  of  the 
merchants  —  the  prostration  of  the  farmers  and  planters  —  the 
drain  of  specie  —  the  repudiation  of  States  —  and  the  bankruptcy 
of  the  treasury — the  government  itself  being  reduced  to  the  use 
of  inconvertible  paper  money,  as  the  only  means  by  which  the 
machine  of  state  could  be  kept  in  motion. 

Once  again,  in  1842,  the  system  of  the  central  government  wns 
changed  —  a  highly  protective  tariff  having  been  substituted  for 
the  revenue  one  of  1841-2.  Few,  if  any,  banks  were  now  created  ; 
foreign  debts  were  now  paid  off;  banks  now  resumed  payment; 
merchants  became,  once  again,  prosperous ;  specie  flowed  in  ;  States 
became  again  able  to  collect  their  taxes,  and  thereby  redeem  them- 
selves from  the  disgrace  of  repudiation  ;  and  the  revenue  increased 
rapidly,  while  the  peaceful  policy  of  the  country  greatly  facilitated 
1  reduction  in  the  sums  demanded  from  the  treasury.  Peaceful  and 
quiet  prosperity  was  the  characteristic  of  this  period  —  there 
having  been  no  speculative  movement  whatsoever,  and,  therefore, 
no  inducement  for  any  extension  of  the  number  of  institutions  em- 
ployed in  money  operations.  At  no  period  in  the  history  of  any 
country,  had  there  existed  so  high  a  degree  of  confidence  in  the 
future,  as  was  found  here  existing,  in  the  year  which  preceded  the 
enactment  of  the  revenue  act  of  August,  1846. 

By  that  act,  the  system  of.  the  central  government  wns  once 
more  changed  —  protection  having  been  abandoned,  and  the  tariff 
having  been  adjusted  with  reference  to  revenue  alone.  It  has 
now  been  in  existence  eleven  years  —  years  characterized  by  an 
amount  of  instability  and  uncertainty  in  all  commercial  affairs, 
almost  equal  to  that  which  existed  in  the  period  which  embraced 
the  embargo  and  non-intercourse  acts,  and  the  war  which  fol- 
lowed. Banks  innumerable  have  been  created.  Prices  have 
risen  and  fallen  repeatedly  —  the  changes  having  been  great, 
almost  beyond  all  previous  precedent.  Flour  and  cotton  have, 
at  times,  been  lower  in  price  than  had  ever  before  been  known  ; 
while,  at  others,  they  have  exhibited  a  tendency  towards  rising  to 
the  point  at  which  they  had  stood  at  the  passage  of  the  free  trade 
act  of  1816.  The  result  is  seen  irt  the  fact,  that  the  manufacturers 
and  the  merchants  are  ruined  —  that  the  number  of  persons  unem- 
ployed is  great,  beyond  all  former  precedent  —  that  the  prices  of 
all  our  staples  are  falling  with  great  rapidity — that  our  ships  are 
unemployed  —  that  our  banks  have  again  been  driven  to  suspen- 
sion— that  the  revenue  has  failed — and  that,  notwithstanding  the 
receipt  of  hundreds  of  millions  of  Californian  gold,  the  government 
is  reduced  again  to  the  necessity  of  using  an  inconvertible  paper 
money,  as  the  only  means  of  keeping  itself  afloat. 

In  a  state  of  barbarism,  theories  abound,  and  they  do  so,  because, 
in  default  of  knowledge,  almost  every  occurrence  is  regarded  as 
accidental,  or  is  attributed  to  the  direct  interposition  of  some 


PRESIDENT   OF   THE   UNITED    STATES.  7 

imaginary  being,  good  or  evil,  as  the  chance  may  be.  With  time, 
however  —  the  regular  succession  of  cause  and  effect  coming 
to  be  understood  —  men,  by  degrees,  arrive  at  the  knowledge 
of  the  existence  of  laws,  by  which  the  movements  of  both  men 
and  matter  are  governed.  What,  then,  is  the  law,  that  may  be 
deduced  from  the  above  brief  history  ?  In  reply,  it  may  be  said, 
that  in  every  case  in  which  the  central  government  has  moved  in 
one  direction,  few  banks  have  been  created  —  speculation  has 
been  trivial  —  specie  has  flowed  in  —  the  credit  of  the  banks  has 
been  maintained — manufacturers,  merchants,  farmers,  and  planters, 
have  been  prosperous  —  States  have  paid  their  interest  —  the 
revenue  has  been  abundant,  and  the  public  debt  has  been  dimin- 
ished—  leaving,  to  the  succeeding  policy,  a  people  in  a  state  of 
high  prosperity  —  a  community  'growing  in  power,  and  in  the 
respect  with  which  they  have  been  regarded  —  and  a  government 
becoming,  from  day  to  day,  more  independent  in  its  action. 

On  the  other  hand,  we  see  that  in  every  case  in  which  it  has 
moved  in  an  opposite  direction,  the  reverse  effects  have  been  pro- 
duced—  many  banks  having  been  created  —  speculation  having 
been  carried  to  the  pitch,  almost,  of  frenzy  —  specie  having  flowed 
out  —  the  monetary  institutions  of  the  country  having  been,  on 
both  the  last  occasions,  driven  to  suspension  —  manufacturers  and 
merchants,  farmers  and  planters,  having  been  ruined  —  stay-laws 
having  been  enacted  —  States  having  repudiated  their  debts  — 
revenue  having  declined  until  it  has  almost  ceased,  and  the 
public  debt  having  increased  —  leaving  to  the  succeeding  policy,  a 
people  in  a  state  of  ruin,  a  community  declining  in  power  and  in 
the  respect  of  the  world,  and  a  treasury  almost  bankrupt. 

Such  being  the  facts  presented  for  consideration,  on  a  survey 
of  the  policy  of  the  country,  for  the  long  period  of  fifty  years,  the 
law  to  be  deduced  therefrom,  would  seem  to  be  as  follows  : 
Under  the  system  which  looks  to  bringing  together  the  producer 
and  the  consumer,  the  community  increases  in  strength,  wealth, 
and  power;  whereas,  under  that,  which  looks  to  separating  the 
consumer  and  producer,  and  is  known  as  "free  trade,1'  it 
declines  in  all  —  becoming  daily  poorer,  weaker,  and  more 
dependent. 

That  being  the  law,  it  would  seem  to  follow  that  the  cause  of 
ruin  is  to  be  found  in  the  central  government ;  and  that  it  is  to  a 
modification  of  its  action,  and  not  to  that  of  the  local  govern- 
ments, we  should  look  for  remedies  for  existing  evils.  That  such 
is  certainly  the  case,  I  propose  to  offer  further  evidence  in  another 
letter  —  remaining  meanwhile,  with  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  December  21st,  185T. 


LETTERS   TO   THE 


LETTER   SECOND. 

To  insure  to  the  people  a  sound  circulation,  appears  to  you, 
Mr.  President,  to  be  "one  of  the  highest  and  most  responsible  dutifes 
of  government"  —  the  one,  too,  requiring  "the  utmost  possible 
wisdom  and  skill,"  so  to  adapt  it  to  "the  wants  of  internal  trade 
and  foreign  exchanges,"  as  to  prevent  fluctuations  in  the  value 
of  property,  such  as  the  American  historian  is  so  frequently  called 
upon  to  record.  "Unfortunately,"  however,  in  your  estimation, 
"under  the  construction  of  the  Federal  Constitution,  which  has 
now  prevailed  too  long  to  be  changed,  this  important  and  deli- 
cate duty  has  been  dissevered  from  the  coining  power,  and  virtually 
transferred  to  more  than  fourteen  hundred  State  banks,  acting 
independently  of  each  other,  and  regulating  their  paper  issues 
almost  exclusively  by  a  regard  to  the  present  interest  of  their 
stockholders." 

Such  being  the  unhappy  results  of  our  Federal  system,  the 
central  government  cannot,  as  yon  say,  "do  much  to  provide 
against  a  recurrence  of  existing  evils."  Utterly  powerless  itself 
for  good,  while  surrounded  by  local  governments  all-powerful  for 
evil,  all  that  it  can  do,  is,  to  "  rely  upon  the  patriotism  and  wis- 
dom of  the  States  for  the  prevention  and  redress  of  the  evil.  If 
they,"  as  you  continue,  "will  afford  us  a  real  specie  basis  for  our 
paper  circulation  by  increasing  the  denomination  of  bank  notes, 
first  to  twenty,  and  afterward  to  fifty  dollars  ;  if  they  will  require 
that  the  banks  shall,  at  all  times,  keep  on  hand  at  least  one  dollar 
in  gold  and  silver  for  every  three  dollars  of  their  circulation  and 
deposits ;  and  if  they  will  provide  by  a  self-executing  enactment, 
which  nothing  can  arrest,  that  the  moment  they  suspend  they 
shall  go  into  liquidation,  I  believe  that  such  provisions,  with  a 
weekly  publication  by  each  bank  of  a  statement  of  its  condition, 
would  go  far  to  secure  us  against  future  suspensions  of  specie 
payments." 

That  efforts  will  be  made  to  do  these  things  is  highly  probable, 
but  to  what  purpose  ?  None,  whatsoever !  The  records  of  our 
State  legislatures,  for  the  last  twenty  years,  present  to  view  a  host 
of  laws,  having  for  their  object  the  production  of  a  state  of  things 
such  as  you  here  desire ;  and  yet,  on  the  first  occasion,  they  are 
set  aside,  and  as  unhesitatingly,  by  the  same  legislative  bodies, 
as  has  been  the  famous  provision  in  the  Charter  Act  of  the  Bank  of 
England.  Why  is  this  ?  —  Because  the  regulation  of  the  currency, 
on  this  side  of  the  Atlantic,  has  been  in  the  hands  of  men,  as 
little  capable  of  executing  that  "highest  and  most  responsible  of 
the  duties  of  government,"  as  Messrs.  Overton  and  Peel  are  proved 
to  have  been  on  the  other.  The  provision  of  the  English  law  being — 


PRESIDENT    OF    THE    UNITED    STATES.  9 

like  those  in  our  own  charters  —  based  upon  a  fallacy,  has  now  been 
twice  suspended  ;  and  suspended  it  must  again  be,  whenever  the 
time  shall  arrive,  that  its  services  will  again  be  needed.  So  is  it, 
and  so  must  it  continue  to  be,  with  all  similar  provisions  in  the 
charters  of  this  country  —  as  long  as  the  action  of  the  central 
government  shall  continue  to  be  hostile  to  the  establishment  of  a 
perfect  currency ;  for  there,  and  not  with  the  local  institutions, 
lies  the  difficulty,  as  you  may  rest  assured. 

Let  it  be  supposed,  however,  that  the  States  continue  to  pursue 
their  own  course  —  doing,  in  the  future,  precisely  as  they  have  done 
in  the  past  —  creating  banks  ad  libitum,  and  not  providing, 
effectively,  for  carrying  out  the  plan  that  is  here  suggested.  That 
they  will  not  so  provide,  seems  very  evident.  More  than  twenty 
years  since,  one  of  your  predecessors  denounced  banks  and  bank 
notes,  in  terms  as  strong  as  those  now  used  by  you ;  and  since  that 
time,  their  denunciation  has  constituted  an  essential  portion  of  the 
creed  of  the  great  democratic  party  —  that  party  of  which  you, 
sir,  are  the  representative ;  but,  with  no  other  effect,  as  yet,  than 
that  of  more  than  quadrupling  the  number  of  banking  institutions 
—  the  328  banks  of  1830  being  now  represented  by  more  than 
1400.  —  This  being  progress  backward,  with  what  reason  can  we 
look  for  such  a  change  in  the  modes  of  thought,  as  would  produce 
a  movement  in  the  direction  you  desire  ?  As  I  think,  with 
none.  —  If  then,  the  facts  be  as  you  hold  them  to  be  —  if  the 
difficulty  does  really  rest  with  the  local  governments  —  and  if  our 
only  chance  of  remedy  is  to  be  sought  in  State  discretion  — then 
are  we  truly  helpless ;  and  then  is  our  Federal  system  a  total 
failure.  —  Fortunately,  such  is  not  the  case.  Fortunately,  the 
difficulty  does  not  lie  with  the  States,  as  you,  I  am  sure,  will 
gladly  be  convinced,  after  reading  the  brief  sketch  of  our  banking 
history,  that  will  now  be  made. 

American  banking  had  its  origin  in  New  England  —  the  good 
sense  of  its  people  having  early  taught  them  the  advantages  that 
must  result,  from  having  places  at  which  those  who  had  money  to 
lend,  could  readily  meet  those  who  desired  to  borrow  —  both  par- 
ties being  thus  relieved  of  all  necessity  for  the  employment  of 
middlemen,  in  the  arrangement  of  their  exchanges.  From  the  close 
of  the  war,  in  1783,  to  1811,  the  average  number  of  banks  in 
existence,  throughout  the  New  England  States,  was  16;  while 
the  number  of  failures  in  all  that  period  —  embracing,  as  it  did, 
the  years  in  which,  under  French  decrees,  and  British  Orders  in 
Council,  the  seas  were  swept  of  American  ships  —  was  only  four. 

Taking  now  a  longer  period,  the  half  century  from  1785  to 
1835  —  embracing  not  alone  the  times  of  piracy  on  the  ocean,  above 
referred  to  —  of  embargoes  and  non-intercourse  laws  —  but,  also, 
those  of  the  war  of  1812  —  of  the  disturbed  period  that  followed 
close  upon  the  peace  —  and  of  the  celebrated  crisis  of  1825  —  we 
find  the  number  of  banking  institutions  to  have  averaged  no  less 


10  LETTERS    TO    THE 

than  sixty;  while  the  total  number  of  failures,  in  the  whole  half 
century,  was  only  twenty,  or  two  in  every  five  years,  of  a  period 
of  greater  commercial  disturbance  than  had  ever  before  been 
known.  Of  these  failures,  five  took  place  in  Massachusetts;  but 
by  these  the  public  suffered  little,  if  any,  loss.  One  paid  all  its 
debts.  A  second,  it  is  believed,  did  the  same.  Of  the  third,  the 
bills  outstanding,  at  the  date  of  its  stoppage,  were  but  $21,000. 
The  remaining  two  certainly  paid  every  outstanding  claim,  except 
$19,878  ;  and  it  is  not  now  certain,  that  even  that  small  sum  was 
not  subsequently  paid.  Admitting,  however,  that  it  remained 
unpaid,  the  total  loss  to  the  people  of  Massachusetts,  in  a  period 
of  fifty  years,  from  dealing  with  banks,  was  less  than  $1000  per  an- 
num, and  not  more  than  one  dollar  in  every  million, — or  the 
ten -thousandth  part  of  one  per  cent.  —  of  the  transactions  whose 
performance  had  been  facilitated  by  the  existence  of  such  institu- 
tions, and  by  the  substitution  of  bank  notes  for  a  metallic  cur- 
rency. —  Small,  even,  as  is  that  proportion,  it  might,  as  I  think, 
be  much  reduced  —  it  being  based  upon  the  idea,  that  the  opera- 
tions facilitated  were  but  forty  times  the  amount  of  the  capital ; 
whereas,  it  might  be  almost  safe  to  place  them  at  four  hundred 
times  that  amount — in  which  case,  the  proportion  of  loss  sus- 
tained, would  be  only  the  hundred-thousandth  part  of  one  per  cent. 

I  pray  you  now,  Mr.  President,  to  reflect  upon  the  quantity  of 
service  rendered  by  banks,  in  collecting,  guarding,  and  transfer- 
ring property — all  of  this  work  being  done,  without  charge  of  any 
kind  ;  and  to  determine  for  yourself  if,  in  any  other  case,  so  large 
an  amount  of  service  is  rendered  at  so  small  a  cost.  The  broker 
charges  an  eighth,  or  a  quarter  per  cent.,  when  he  arranges  a 
transfer  of  stocks.  The  wholesale  dealer  charges  2^,  or  5  per 
cent.  The  retailer  takes  10,  15,  or  20  per  cent.  ;  but  the  bank 
performs  an  amount  of  service  —  whose  sum  is  equal  to  the  total 
amount  of  the  exchanges  of  society,  in  which  money  is  used  — 
charging  nothing  whatsoever.  Sometimes,  a  banking  institution, 
badly  managed,  falls  into  difficulty.  So,  however,  is  it  with 
brokers  and  commission  merchants.  In  the  case  of  these  latter, 
however,  the  loss  is  generally  almost  total ;  whereas,  in  that  of 
the  banks,  the  loss  falls  almost  exclusively  upon  those  who  had 
done  the  work — the  stockholders. 

Seeing  the  facts  to  be  as  I  state,  I  would  frsk  you,  Mr.  Presi- 
dent, to  say,  if  you  had  been  a  resident  of  Massachusetts  —  and 
what  is  said  of  that  State  is  almost  equally  true  of  all  New  Eng- 
land, in  the  period  above  referred  to  —  would  you  have  been 
pleased,  whenever  you  had  a  large  amount  of  money  to  receive, 
to  .find  yourself  compelled  to  carry  your  silver  on  your  back,  or  in 
a  wheelbarrow ;  or  to  pay  a  commission  to  have  it  converted  into 
gold,  in  order  that  you  might  be  enabled  to  transfer  it  from  place 
to  place ;  and  to  do  all  this,  too,  because  it  had  been  determined 
that  it  was  the  duty  of  "the  government"  to  furnish  a  currency — 


PRESIDENT    OF   THE   UNITED   STATES.  11 

that  that  doty  required  great  "  wisdom  and  skill"  —  by  the  appli- 
cation of  which,  it  had  arrived  at  the  conclusion,  that  shopping 
with  bags  full  of  dollars  was  far  more  convenient  and  agreeable 
than  the  performance  of  the  same  operation,  with  the  aid  of 
pocket-books  filled  with  pieces  of  paper,  by  means  of  which  this 
property  in  money  could  be  transferred  without  the  necessity  for 
hauling  the  silver,  or  the  gold  ?  That  you  would  have  preferred 
the  notes,  I  feel  assured. 

In  New  York,  the  banks,  in  the  thirty  years  prior  to  1837,  had 
averaged  26  in  number ;  and  the  total  number  of  failures  had 
been  16  ;  or  about  one-half  of  one  per  cent.,  per  annum.  The 
losses,  however,  fell  so  almost  exclusively  upon  the  stockholders, 
that  if  we  here  estimate  the  risk  of  loss  to  the  community,  by 
reason  of  dealing  with  banks,  or  of  using  bank  notes,  at  a  single 
dollar  in  a  million,  it  is  much  beyond  the  truth. 

In  Pennsylvania,  the  average  number  of  banks  in  existence,  in 
the  same  period,  had  been  29,  and  the  total  number  of  failures 
had  been  19  —  nearly  all  of  them,  in  the  calamitous  period  that 
followed  the  adoption,  by  the  central  government,  of  the  free 
trade  policy  of  1816-18.  Being  an  agricultural  state,  Pennsyl- 
vania suffered  heavily  from  the  great  depression  in  the  prices  of 
all  her  products,  when  she  lost  the  domestic  market  that  had  been 
supplied  by  mines  and  furnaces  at  home,  and  factories  and  fur- 
naces in  other  States.  From  1820  to  1837,  there  were  but  three 
failures,  all  of  them  trivial  in  amount.  In  that  period,  all  the 
loss  to  the  people  of  the  State,  from  trading  with  banks,  or 
from  the  use  of  bank  notes,  was  not  even  a  single  dollar  in  a 
million  —  that  having  been  all  the  price  they  had  paid,  for  the 
vast  amount  of  services  performed  by  their  banking  institutions. 

Passing  thence  south  and  west,  we  find,  at  every  stage,  a 
diminishing  density  of  population,  attended  with  increase  of  risk. 
South  of  Pennsylvania  and  of  the  Ohio  river,  there  were,  in  the 
period  ending  in  1836,  no  less  than  84  failures,  while,  west  of 
that  State,  the  number  was  27.  Nearly  the  whole  of  them  had 
resulted,  as  had  those  of  Pennsylvania  herself,  from  the  premature 
attempt  to  establish  shops  for  the  purchase  and  sale  of  money,  in 
regions  where  all  desired  to  buy,  and  none  had  that  commodity 
to  sell.  The  consequences  were  such  as  might  well  have  been 
anticipated.  After  fruitless  attempts  to  establish  themselves  in 
business,  they  stopped  payment  —  doing  thus,  as  would  be  done 
by  an  individual  who  had  engaged  in  a  pursuit  for  which  the 
community  was  not  prepared. 

North  and  east  of  the  Ohio  river,  the  total  number  of  failures, 
from  the  first  institution  of  a  bank,  to  the  year  1836,  was  precisely 
b'5  ;  or,  less  than  one-half  of  the  failures  of  private  bankers, 
in  England,  in  the  years  1821-26  —  a  period  in  which  there  was 
no  extraordinary  occurrence  —  no  change  from  war  to  peace,  or 


12  LETTERS   TO   THE 

from  peace  to  war  —  to  produce  a  feeling  of  insecurity,  or  to  be 
the  cause  of  loss. 

Including  all  the  States,  north,  south,  east  and  west,  the  num- 
ber of  failures,  from  the  date  of  the  first  bank,  had  been,  in  1836, 
less  by  one-fourth  than  those  of  England,  in  the  three  years, 
1814-16;  and  the  amount  of  loss  sustained  by  the  American 
public  in  a  century,  had  not,  as  I.  believe,  been  one-twentieth 
as  great,  as  that  of  the  people  of  England,  in  three  short 
years. 

Since  1836,  there  has  been  a  change,  the  causes  of  which  will 
be  shown  in  another  letter. 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 

Philadelphia,  December  23d,  1857. 


PRESIDENT   OF   THE   UNITED   STATES.  13 


LETTER    THIRD. 

HAVING  small  respect  for  authority,  General  Jackson  attached 
little  value  to  the  labors  of  Hamilton  and  Madison,  commentators 
on  the  Constitution  ;  or  to  those  of  Jay,  Ellsworth,  and  Marshall 
—  the  men,  Mr.  President,  to  whom  we  owe  those  early  decisions, 
which  laid  the  foundation  of  our  constitutional  law  —  decisions 
fully  acquiesced  in,  by  all  the  distinguished  men  who  had  pre- 
ceded him  in  the  Presidential  chair,  from  Washington  to  the 
younger  Adams.  Preferring  his  own  construction  of  that  instru- 
ment, he  was  little  more  than  seated  in  the  high  position  to  which 
he  had  been  called,  than  he  commenced  suggesting  doubts,  as  to  the 
power  of  the  government  to  delegate  to  individuals,  the  power  to 
exercise,  throughout  the  Union,  the  banking  privilege.  In  his 
view,  a  State  bank,  based  upon  the  public  revenues,  and  managed 
of  course,  by  officers  of  the  general  government,  would  have  been 
greatly  to  be  preferred. 

Centralization  being  now  the  order  of  the  day,  and  Congress 
failing  to  obey  his  orders,  we  find  him  next,  on  his  own  motion, 
withdrawing  the  public  moneys  from  where  they  had  been  placed 
by  Congress  —  and,  at  his  sovereign  will  and  pleasure,  dividing 
them  among  the  local  institutions.  Next,  he  is  found,  urging  the 
States  to  the  creation  of  local  banks,  to  replace  the  great  institu- 
tion with  which  he  was  now  at  war.  That  done,  we  see  him 
next,  declaring  war  against  all  banks  and  notes  —  the  whole 
power  of  the  central  authorities  being  now  exerted,  for  the  coer- 
cion of  the  States  into  the  prohibition  of  bills  of  the  smaller 
denominations.  Gold  being  now  regarded  as  the  one  thing  need- 
ful, it  was,  as  we  were  told,  to  be  made  to  "run  up  the  Missis- 
sippi ;"  and,  that  it  might  do  so,  the  standard  was  changed  —  the  ex- 
changeable value  of  gold,  as  compared  with  silver,  having  been  raised 
to  16  to  1.  Following  on  this,  we  have  an  order  to  the  receivers 
of  the  revenue,  to  accept  of  nothing  but  the  precious  metals  — 
notes  of  all  denominations  being  thus  discredited,  that  the  people 
might  be  induced  to  make  a  run  upon  the  banks.  Now,  for  the 
first  time  in  the  history  of  the  world,  do  we  find  a  regularly  organ- 
ized government  engaged  in  a  war  to  the  knife  against  credit,  in 
all  its  forms ;  and  now,  for  the  first  time  in  a  period  of  peace, 
were  the  banks  of  the  Union  compelled  to  close  their  doors, 
against  those  who  desired  payment  of  their  notes.  Next,  we 
find  the  Treasury  demanding  additional  powers,  and  gently  inti- 
mating that  by  aid  of  the  public  revenues,  the  domestic  exchanges 
might  be  much  facilitated.  On  one  side,  the  Postmaster-General 
desires  that  his  agents  may  be  employed  in  the  transmission  of 
private  funds ;  while,  on  another,  the  attention  of  Congress  is  spe- 


14  LETTERS   TO   THE 

oially  invited  to  the  advantage  that  would  result  from  the  insti- 
tution of  a  government  office,  charged  with  the  issue  of  paper 

money thereby  superseding  the  local  institutions  altogether. 

The  war  thus  commenced,  has  since  been  followed  up  —  the  use 
of  circulating  paper  having  been  repudiated  by  the  government — 
vaults  having  been  constructed,  in  which  to  store  the  public  trea- 
sures—  and  the  standing  topic  of  denunciation,  at  conventions  of 
towns  and  cities,  counties  and  States,  and  of  the  Union  itself, 
having  been  banks  and  paper  money.  The  result  is  seen,  in  the 
fact,  that  gold  has  ceased  to  circulate,  and  that  the  treasury  is 
driven  to  the  use  of  inconvertible  notes. 

Such  is  the  history  of  banking  in  the  United  States,  since  the 
peace  of  1783  —  a  period  of  seventy-five  years,  during  the  first 
fifty  of  which,  the  power  reserved  by  the  States  had  been  respected 
and  that,  too,  most  scrupulously — by  Washington,  Adams,  Jef- 
ferson, Madison,  Monroe,  and  the  younger  Adams;  whereas, 
since  that  time,  there  has  been  an  unceasing  effort  to  weaken  the 
States,  while  strengthening  the  central  power.  How  far  the  one, 
or  the  other,  of  the  systems  thus  described,  has  tended  to  increase 
the  security  of  persons  and  of  property,  by  giving  to  the  people 
that  which  you,  Mr.  President,  so  much  desire,  "a  sound  circu- 
lating medium,"  the  amount  of  which  "has  been  adapted  with 
the  utmost  wisdom  and  skill "  to  the  needs  of  commerce — thereby 
insuring  that  "the  market  value  of  every  man's  property"  shall 
not,  by  reason  of  its  fluctuation,  "be  increased  or  diminished" — 
and  thus  preventing  "  the  incalculable  evil"  that  might  otherwise 
be  produced — is  shown  in  the  following  brief  resumd  of  the  above 
short  history. 

For  nearly  half  a  century — during  which,  banks,  and  their  circu- 
lation, had  been  left,  in  accordance  with  the  Constitution,  under 
the  control  of  the  local  legislatures,  their  number  was  so  pru- 
dently increased,  that,  at  its  close,  it  was  only  328.  In  half  that 
time,  during  which  the  central  government  has  undertaken  to  su- 
persede the  State  authorities,  it  has  grown  to  more  than  1400. 

For  half  a  century,  during  which  the  State  authorities  remained 
undisturbed,  neither  the  people  nor  the  government  ever  failed, 
in  time  of  peace,  to  be  supplied  with  coin  for  circulation.  In 
half  that  time,  under  the  direction  of  the  central  government,  both 
government  and  people  have  twice  been  driven  to  the  use  of  an 
irredeemable  paper  circulation. 

For  half  a  century,  the  State  authorities  so  managed  the  bank- 
ing system,  that  no  general  suspension  ever  occurred,  except 
when  —  at  the  instance  of  the  general  government,  and  after 
having  largely  aided  that  government,  in  the  then  existing  war 
against  Great  Britain  —  they  stopped  in  the  autumn  of  1814,  and 
remained  suspended,  until  the  return  of  peace  enabled  them  once 
again  to  resume  their  operations.  In  half  that  time,  since  the 
central  government  has  assumed  to  supersede  the  local  ones, 


PRESIDENT    OF    THE    UNITED    STATES.  15 

there  have  been  two  suspensions  that  have  been  general ;  and  a 
third,  in  which  were  embraced,  all  the  States  that  had  followed 
the  lead  of  the  central  power,  in  prohibiting  the  use  of  the  smaller 
notes  —  the  only  States  that  did  not  then  suspend,  having  been 
those  which  had  persisted  in  the  determination  to  regulate  their 
currency  for  themselves.  Once  again,  the  suspension  has  ceased 
to  be  general ;  and  I  would  now,  Mr.  President,  ask  your  particular 
attention  to  the  fact,  that  all  the  States,  with,  I  believe,  but  one 
exception,  that  use  small  notes,  have  now  resumed,  while  all  of 
those,  with  one  exception,  that  have  prohibited  the  smaller  notes, 
remain  suspended. 

Such,  Mr.  President,  are  the  facts,  and  being  such,  they  fur- 
nish, as  I  think,  a  reply  that  is  most  conclusive  to  the  argument 
you  have  just  presented,  in  favor  of  an  extension  of  the  central 
power.  All  of  them  having  passed  before  your  own  eyes,  all  of 
them  have  been  known  to  yon,  but,  by  reason  of  the  unceasing 
demands  upon  your  time,  in  the  various  honorable  offices  you  have 
been  called  to  fill,  many  of  them  had,  doubtless,  escaped  your 
recollection.  Had  it  been  otherwise,  you  certainly  would  have 
hesitated,  before  recommending  any  enlargement  of  a  central 
power,  whose  injurious  influences  had  been  so  fully  demonstrated. 
While  recognizing  the  authority  of  the  States,  as  being  beyond 
the  reach  of  any  direct  assault,  you  suggest  a  mode,  by  means  of 
which,  power  may  now  be  centralized  in  the  hands  of  Federal 
agents ;  and  yet,  the  mere  fact  of  the  necessity  for  resorting  to 
means  so  indirect,  would  seem  to  me  to  furnish  proof  conclusive 
of  your  error.  It  is  within  the  power  of  Congress  to  establish 
"  uniform  laws  on  the  subject  of  bankruptcies  throughout  the 
United  States;"  but,  it  being  not  within  it  to  enact  any  law, 
that  shall  not  be  of  general  application  to  all  the  people  of  the 
Union,  the  enactment  of  such  an  one  as  that  you  now  suggest, 
would  certainly  seem  to  be  a  direct  violation  of  the  Constitution. 
How  far  it  is  within  the  power  of  Congress,  to  pass  a  law  that 
shall  embrace  both  individuals  and  corporations,  it  is  not  for  me 
to  say  ;  but,  certain  it  is,  that  eminent  jurists  have  held,  and  do 
still  hold,  that  the  States  did  not,  when  accepting  the  Constitu- 
tion, grant  to  Congress  any  control,  whatsoever,  over  corporations 
holding  their  existence  under  the  local  laws.  That,  however, 
Mr.  President,  will  be  a  question  of  small  importance,  if  I  shall 
have  succeeded  in  satisfying  you,  that  all  the  monetary  diffi- 
culties we  have  experienced,  and  which  you  so  well  describe,  have 
had  their  origin  in  the  attempt  to  withdraw  from  the  States,  the 
power  reserved  to  them  by  the  Constitution  —  in  an  excess  of  cen- 
tralization, and  not  in  any  excess  of  localization. 

We  are  told,  however,  that  the  quantity  of  gold  now  in  the 
country,  amounts  to  no  less  than  $260,000,000  ;  and  are,  there- 
fore, urged  to  force  it  into  use.  It  may  be  so,  that  there  is  that 


16  LETTERS    TO    THE 

quantity  ;  but,  if  so,  where  is  it  ?  A  year  since,  the  banks  had 
$50,000,000;  and'they  have  no  more  now.  A  year  since,  the 
sub-treasuries  held  $20,000,000;  now,  they  have  $6,000,000. 
Adding  together  these  two  sums,  we  have  $56,000,000 — leaving 
$204,000,000  yet  to  be  accounted  for.  Where  may  they  be  found  ? 
lu  use  among  the  people  they  certainly  are  not,  for  the  largest 
calculation  of  gold  and  silver  in  use,  cannot  exceed  one  dollar 
per  head  —  giving  $30,000,000  as  the  quantity  usefully  employed, 
•  and.  leaving  $174,000,000  yet  to  be  discovered.  Where  must 
they  be  sought  ?  If  anywhere,  they  are  hoarded.  Why  are  they 
hoarded  ?  Because  the  government  sets  the  example  of  hoard- 
ing the  precious  metals,  and  thus  teaches  the  people  what  it  is, 
that  they  themselves  should  do.  Because,  for  twenty  years  past, 
the  government,  and  its  friends,  have  denounced  banks  as  being 
insecure,  and  bank  notes  as  being  worthless  rags.  Because,  in 
opposition  to  the  practice  of  all  really  enlightened  governments, 
our  own  has  been,  for  the  last  five  and  twenty  years,  engaged  in 
an  almost  unceasing  war  upon  private  credit.  For  these  reasons 
it  is,  that  the  precious  metals  are  now  so  extensively  hoarded,  and 
while  so  hoarded,  as  useful  as  an  equal  weight  of  pebble-stones 
would  be. 

How  can  all  this  gold  be  brought  into  active  circulation  ?  An 
answer  to  this  question,  Mr.  President,  may  be  found  in  one  of 
those  delightful  fables,  that  you,  in  early  life,  must  have  often 
read.  The  wind  and  the  sun  differed,  one  day,  as  to  which  could 
most  readily  compel  a  traveller  to  lay  aside  his  cloak.  The  wind 
commenced  blowing  with  all  his  might ;  but  the  harder  he  blew, 
the  tighter  the  cloak  was  held.  The  sun  next  tried  his  hand  — 
darting  his  warmest  beams  upon  the  traveller's  head.  Forthwith 
the  hold  upon  the  cloak  was  loosened,  and  before  the  lapse  of 
many  moments,  it  was  thrown  aside.  Here,  Mr.  President,  is  a 
great  lesson,  by  the  study  of  which  the  government  might  largely 
profit.  For  more  than  twenty  years,  your  predecessors  have  been 
endeavoring  to  force  the  people  to  the  use  of  gold  —  seeking  to 
accomplish  that  object,  by  means  of  the  annihilation  of  the  credit 
of  banks  and  individuals ;  but  the  effect,  as  yet,  has  been  only 
that  of  driving  it  out  of  circulation,  and  into  private  hoards,  the 
amount  of  which  is,  probably,  immensely  great.  Having  played 
the  part  of  the  wind,  and  failed,  let  it  now,  Mr.  President,  under- 
take that  of  the  sun  —  seeking  to  increase  the  confidence  of  the 
people  in  one  another;  and  the  effect  will  speedily  be  seen,  in  the 
re-appearance  of  the  gold  that  is  now  so  useless.  Let  this  be 
done — let  the  treasury  smile  upon  the  people,  instead  of  frowning 
upon  them — let  it  make  common  cause  with  the  producing  classes, 
and  not  with  the  merely  consuming  ones  —  let  it  cease  to  make 
war  upon  the  powers  of  the  States  —  and  you  will  have,  in  your 
next  message,  the  gratification  of  offering  to  your  fellow-citizens 
a  picture  directly  the  reverse  of  that  which  you  have  now  presented. 


PRESIDENT   OF  THE   UNITED   STATES.  17 

Oar  system  finds  its  base  in  local,  and  not  in  central,  action. 
The  tendency  of  almost  all  the  acts  of  the  Federal  government, 
for  the  last  five  and  twenty  years,  having  been  towards  the  aug- 
mentation of  the  central  power  at  the  expense  of  that  which  is 
local,  the  injurious  effects  become  more  visible,  from  day  to  day — 
human  progress,  in  whatsoever  direction,  being  always  one  of  con- 
stant acceleration.  That  such  is  the  case,  is  clearly  shown  in  the 
recommendations  of  the  document  now  before  me  —  leading,  as 
they  inevitably  must,  to  the  entire  suppression  of  the  power  of 
the  States,  in  reference  to  that  which  you,  yourself,  regard  as  one 
of  the  most  important  of  governmental  duties.  A  closer  exami- 
nation, and  more  careful  study  of  the  facts  here  given,  would,  as 
I  think,  have  satisfied  you,  that  it  is  to  the  centralizing  tendencies 
of  recent  years,  we  owe  the  extraordinary  demoralization  to  which 
your  attention  will  next  be  called,  by 

Yours,  with  great  respect, 

HENRY  C.  CAREY. 

Philadelphia,  December  %5th,  185T. 


18  LETTERS    TO    THE 


LETTER    FOURTH. 

STEADINESS  and  regularity,  Mr.  President,  are  the  character- 
istics of  advancing  civilization.  Instability  and  irregularity, 
those  of  advancing  barbarism.  The  first  are  found,  as  you  have 
seen,  and  in  a  degree  that  is  quite  remarkable,  in  the  half  century 
during  which  the  local  authorities  controlled  our  banking  opera- 
tions—  there  having  been,  as  has  been  shown,  no  instance  of 
general  suspension,  in  that  long  period,  except  in  1814,  and  then, 
at  the  instance  of  the  central  government ;  whereas,  in  the  five 
and  twenty  years,  in  which  the  local  authorities  have  been,  to 
so  great  an  extent,  superseded,  the  suspensions  have  been  three 
in  number.  Need  we  wonder,  then,  that  "  a  state  of  crisis 
may  now,"  in  the  opinion  of  foreign  journalists,  be  regarded 
as  "the  normal  condition  of  the  great  republic  of  the  West?" 
Assuredly  not !  It  is  the  natural  result  of  a  centralizing  policy, 
that  at  one  time,  urges  upon  the  people  the  creation  of  banks,  and 
at  another,  denounces  such  institutions  as  wholly  unworthy  of 
credit  —  of  a  policy  that,  at  one  moment,  squanders  the  public 
property  with  a  view  to  the  extension  of  railroads,  and  at 
another,  urges  the  passage  of  a  special  bankrupt  law,  with  a  view 
to  secure  to  the  central  government,  the  exclusive  control  of  both 
banks  and  roads. 

Instability  tends  to  increase  the  wealth  of  the  few  who  are  rich 
—  while  impoverishing  the  many  who  look  to  the  sale  of  labor 
for  the  means  of  obtaining  food  for  their  wives,  their  children, 
and  themselves.  It  impoverishes  the  active  and  useful  members 
of  society ;  but  it  enables  the  idle  and  the  useless  to  accumu- 
late fortunes,  at  the  expense  of  those  who  make  roads,  build  mills, 
and  open  mines,  and  thus  increase  the  productive  powers  of  labor- 
ing men.  Instability  has  been,  since  the  central  government 
undertook  the  regulation  of  the  currency,  the  essential  character- 
istic of  our  policy,  and  hence  it  is  : 

That,  notwithstanding  grants  of  land  by  millions,  and  tens  of 
millions,  of  acres,  for  the  construction  of  railroads,  and  notwith- 
standing an  unceasing  effort  to  promote  the  carrying  interest,  at 
the  expense  of  the  producing  one  —  railroads  and  canals,  that 
have  cost  $1,000,000,000,  have  fallen  to  less  than  $400,000,000, 
and  their  proprietors  are  ruined. 

That,  the  factories  of  the  country,  too,  are  in  a  state  of  ruin. 
For  years,  they  have  struggled  against  the  tide,  but  now,  the 
tide  has  overwhelmed  them  —  reducing  to  a  state  of  poverty, 
thousands  of  the  men  to  whose  unceasing  efforts,  we  have  owed 
the  introduction  and  perfection  of  the  most  useful  manufactures. 
Hundreds  of  millions  have  been  expended  upon  the  creation  of 


PRESIDENT   OF  THE   UNITED    STATES.  19 

magnificent  works,  whose  value  might  now  be  counted  by  little 
more  than  tens  of  millions. 

That,  the  machine  shops,  too,  are  closed —  machines  not  being 
required,  when  mills  have  ceased  to  work. 

That,  the  mechanic  is  now,  everywhere,  turned  adrift,  to  seek 
in  scratching  the  soil,  the  means  of  support  that  his  trade  will  not 
afford  him  —  he,  and  his  country,  thus  losing  the  use  of  the 
capital,  of  knowledge,  he  had  obtained  by  means  of  a  long 
apprenticeship. 

That  his  daughters,  too,  are  deprived  of  work,  and  not  unfre- 
quently,  forced  to  make  their  election  between  starvation  on  the 
one  hand,  and  prostitution  on  the  other. 

That,  mines  are  closed,  and  miners  are  driven  to  seek  employ- 
ment as  common  laborers  —  leaving  their  wives  and  children  to 
suffer  for  want  of  food. 

That,  hundreds  of  little  capitalists,  who  had  invested  their  all 
in  the  creation  of  machinery,  for  facilitating  increase  in  the  supply 
of  fuel,  are  now  in  a  state  of  ruin  —  the  sheriff  selling  out  their 
little  properties,  which  are  being  purchased  by  the  men  who  are 
already  rich. 

That,  furnaces  capable  of  yielding  hundreds  of  thousands  of 
tons  of  iron,  are  closed,  and  their  proprietors  ruined. 

That,  mines  of  ore,  endless  in  quantity,  and  capable  of  supply- 
ing lead,  iron,  and  copper,  to  the  world,  — mines,  too,  that  have 
required  vast  amounts  of  capital  for  their  development  —  are  idle ; 
while  the  men  by  whom  they  had  been  developed,  are  reduced  to 
poverty. 

That,  rolling  mills,  capable  of  supplying  half  the  iron  required 
for  the  Union,  are  closed — to  the  utter  ruin  of  those  who  own  them. 

That,  ships,  wholly  unemployed,  are  rapidly  accumulating  in 
our  ports,  while  the  ships  themselves  as  rapidly  decline  in  value. 

That,  while  the  commerce  of  the  world  tends,  everywhere,  to 
seek  the  aid  of  steam,  and  while  steamers  are  fast  superseding 
sailing  ships,  the  people  of  the  Union  find  themselves  obliged  to 
depend,  almost  exclusively,  upon  the  ships  of  other  nations ;  and 
are  likely,  before  the  close  of  your  administration,  Mr.  President, 
to  find  themselves  without  a  single  ocean  steamer,  engaged  in  any 
trade,  in  which  foreign  competition  is  not,  by  law,  prohibited. 

That,  the  trade  with  California,  upon  which  we  have  hereto- 
fore relied  for  supplies  of  gold,  has  so  far  passed  away,  as  to 
require  from  us  little  more  than  supplies  of  butter,  shoes,  boots, 
and  agricultural  machines  —  that  being  all  the  commerce  now 
resulting,  from  an  expenditure  of  labor  and  capital  that,  had  they 
been  applied  at  home,  would  have  yielded  at  least  a  thousand  mil- 
lions a  year. 

That  railroads  and  ships,  mills  and  factories,  mines  and  fur- 
naces, are,  thus,  involved  in  one  common  ruin  —  the  depreciation 
in  the  value  of  all  this  property,  being,  at  the  smallest  calculation, 
$1,000,000,000. 


20  LETTERS    TO    THE 

That,  the  trading  interest  —  so  long:  the  almost  exclusive  object 
of  governmental  favor  —  participates  in  the  general  ruin. 

That,  the  owners  of  houses  are  unable  to  collect  their  rents ; 
and  that,  their  property  declines  in  value,  while  the  taxes  are 
increased. 

That  the  farmer  finds  his  consumers  declining  in  number,  while 
his  competitors  are  as  rapidly  increasing  —  the  system  of  the 
country  tending,  as  it  long  has  tended,  towards  forcing  into  the 
work  of  cultivation  all  who  thus  far  have  found,  or  should  have 
found,  employment  in  mills,  machine  shops,  mines,  and  furnaces  ; 
and  that,  he  has  now  before  him,  should  Providence  favor  him 
with  liberal  crops,  the  prospect  of  seeing  flour  at  a  lower  price 
than  has  ever  yet  been  known. 

That  the  planter  has  before  him  a  reduction  in  the  home  de- 
mand for  his  commodity,  to  the  extent  of  250,000  bales;  that, 
almost  simultaneously  with  this  decreased  demand,  his  crop  is 
likely  to  be  four  times  as  much  increased  :  and  that,  therefore, 
should  he  be  favored  in  the  seasons,  he,  too,  is  likely  to  see  his 
staple  reduced  to  a  price  lower  than  he  has  ever  seen.* 

Taking  the  probable  reduction  in  the  value  of  land,  and 
in  that  of  slaves,  at  only  $1,000,000,000,  and  adding  it  to  that 
in  railroads,  mills,  mines,  and  furnaces,  we  obtain  the  sum  of 
$2,000,000,000.  Adding  now,  thereto,  the  reduction  in  the 
value  of  real  estate,  other  than  farming  and  planting  land,  we 
shall  obtain  a  sum  of  not  less  than  $2,500,000,000,  as  the  total 
amount  reduced  ;  and  it  may  be  almost  twice  as  much. 

Somebody  profits  by  all  this  loss.  Who  is  it  ?  The  mortgagee, 
who  enters  upon  possession  —  first  selling  out  his  poor  debtor, 
whether  the  little  farm'er  of  the  West,  or  the  great  proprietor  of 
mills,  mines,  or  furnaces  in  the  East. — The  usurer,  who  obtains 
one,  two,  three,  or  even  five  per  cent,  per  month,  until  the  poor 
borrower  is  ruined. — The  government  official,  whose  salaries  and 
perquisites  have  been  already  doubled,  trebled,  and  quadrupled, 
and  will  be  now  increased  in  value,  while  the  working  men  around 
him  suffer,  if  even  they  do  not  perish,  for  want  of  food. — The 
member  of  Congress,  whose  salary  has  been  doubled,  because  of 
the  rise  in  the  price  of  food,  and  will  so  remain,  now  that  its 
price  has  fallen.  —  The  non-producers  are  thus  enriched,  while 
the  men  of  enterprise,  and  the  laborers,  are  despoiled. 

*  In  the  four  years  which  followed  the  bankruptcy  of  1841,  when  specu- 
lation had  ceased,  and  when  all  were  required  to  work,  the  cotton  crop  was 
greater  by  a  total  of  2,000,000  bales,  than  in  the  four  previous  ones.  Nine 
years  since,  the  crop  had  reached  2,800,000  bales;  and  now,  with  favorable 
seasons,  there  exists  no  reason  why  it  should  not  attain  the  quantity  of 
4,000,000  bales.  The  land  is  prepared  for  it,  and  the  people  are  there  to 
work  it.  The  crop  must  largely  increase,  and  the  European  demand  must 
lessen,  because,  with  the  decline  in  the  price  of  food,  of  which  our  policy  will 
be  the  cause,  the  ability  of  European  farmers  to  purchase  cloth  must  decline. 


PRESIDENT   OF  THE   UNITED   STATES.  21 

Turning  now  to  the  Treasury,  we  find  it  already  bankrupt,  even 
at  the  commencement  of  this  downward  movement.  Irredeemable 
paper  being  now  to  be  substituted  for  gold  and  silver,  the  influx 
of  foreign  merchandise,  and  the  efflux  of  the  precious  metals,  will 
be  much  promoted ;  and  thus  will  the  way  be  smoothed,  towards 
total  bankruptcy,  such  as  was  witnessed  in  1841  and  1842. 

Such,  Mr.  President,  being  the  material  condition,  present  and 
prospective,  of  your  fellow-citizens,  we  may  now,  for  a  moment, 
turn  to  their  moral  one. 

Commencing  with  the  central  government  and  its  capital,  we 
find  an  amount  of  official  corruption  not  exceeded  in  the  world, 
outside  of  the  Turkish  Empire  —  the  affairs  of  the  Union,  for 
the  past  few  years,  having  been  administered  with  a  single  eye  to 
the  profit  of  official  persons  and  their  friends,  and  not  with  refe- 
rence to  the  interests  of  the  people.  Passing  thence,  to  town, 
city,  and  county  administrations,  we  find  a  continually  growing 
power,  on  the  part  of  the  central  government,  to  control  and 
direct  their  elections,  with  correspondent  growth  of  fraud  and 
peculation. 

Turning  now  to  the  commercial  capital,  I  find  its  situation 
thus  described  in  a  journal  of  the  day ;  and  unfavorable  as  is  the 
description,  none,  as  I  think,  can  deny  its  truth  : 

"  There  is  no  town  in  Christendom  where,  in  proportion  to  the 
population,  an  equal  amount  of  crime  is  annually  committed.  We 
do  not  go  much  beyond  the  letter  of  the  fact,  when  we  say  that 
murder  is  a  thing  here  of  daily  occurrence.  Yillanous  and  das- 
tardly outrages  are  nightly  perpetrated  in  the  streets,  and  some- 
times in  the  open  light  of  day.  The  city  is  the  head-quarters  of 
the  rogues,  thieves  and  pickpockets  that  are  scattered  throughout 
the  country,  and  is  the  main  theatre  of  their  operations.  Nowhere 
else  in  this  country  does  vice  plant  itself  so  openly,  and  with  such 
impunity.  Nowhere  is  so  much  countenance  given  to  rowdy 
gangs,  that  keep  quiet  people  in  terror.  Nowhere  have  things 
gone  on  from  bad  to  worse  so  rapidly,  until  it  is  at  length  appa- 
rent that  unless  some  speedy  change  comes  over  the  police 
management  in  New  York,  and  the  administration  of  the  criminal 
courts,  a  state  of  anarchy  will  ensue,  or  honest  citizens  will  be 
driven  to  organize,  and  take  the  law  in  their  own  hands." 

Passing  outward  from  New  York,  we  find  a  rapid  growth  of 
rowdyism  and  intemperance,  with  corresponding  decline  in  the 
security  of  person  and  of  property  —  frauds,  peculations,  seduc- 
tions, murders,  and  crimes  of  every  kind,  increasing  with  such 
rapidity,  as  fairly  to  warrant  the  assertion  in  a  recent  Southern 
journal,  that  "the  United  States  are  fast  becoming  a  very  stench 
in  the  nostrils  of  mankind. ' '  * 


*  «« It  is  useless  to  wink  at  the  fact.  Villany,  in  every  shape,  is  celebrating 
its  horrid  gala-day  throughout  the  United  States.    Details  of  murders  in  our 


22  LETTERS   TO   THE 

Such,  Mr.  President  is  the  material  and  moral  condition  of  the 
people,  to  the  administration  of  whose  affairs  you  have  recently 
been  called.  Desiring  to  find  its  parallel,  you  will  be  led,  most 
naturally,  to  look  to  the  closing  years  of  the  free  trade  period, 
which  preceded  the  passage  of  the  protective  tariff  of  1842.  Seek- 
ing its  opposite,  you  will  be  led,  as  naturally,  to  look  to  the 
closing  years  of  the  protective  periods,  established  by  the  tariffs 
of  1828  and  1842  —  years,  in  which  the  country  presented  to  view 
a  picture  of  peaceful  and  quiet  progress,  such  as  the  world  had, 
theretofore,  never  seen. 

The  tendency  towards  the  establishment  of  a  sound  morality, 
Mr.  President,  in  every  country  of  the  world,  has  been  in  the  direct 
ratio  of  the  steadiness  and  regularity  of  the  societary  movement 
—  the  gambling  tendencies  of  the  barbaric  ages  then  tending  to 
disappear.  That  principle  being  admitted,  I  would  ask  you  to 
study  the  action  of  the  central  government,  from  the  day  on  which 
it  assumed  to  control  the  monetary  movement  of  the  country,  and 
satisfy  yourself,  as  you  readily  may,  that  to  its  vicious  course  of 
action,  and  not  to  error  in  the  local  governments,  we  owe  the  de- 
moralization that  now  exists.  As  a  member  of  the  old  Federal 
party,  you  will,  I  am  sure,  rejoice  to  find  this  fact  established. 
That  you  may  do  so,  I  would  beg  you  to  look  to  the  urgent 
recommendations  of  1835,  for  the  establishment  of  State  banks, 

cities  fill  the  columns  of  the  journals.  One  reads  of  butchery  until  the  very 
letters  in  the  printed  columns  appear  bloody;  of  arsons,  until  the  light  of  con- 
flagration seems  to  throw  its  lurid  glare  throughout  the  apartment ;  of  fraud, 
until  a  line  of  sleek,  hypocritical,  would-be-respectable  men  range  them- 
selves before  us ;  and  of  crimes  yet  fouler  and  more  bestial,  until  we  tremble 
lest  the  lightnings  of  offended  Heaven  should  descend  from  a  cloudless  sky, 
and  overwhelm  the  earth  in  ruin." — Miner's  Journal. 

"  Official  roguery  has  been  rampant.  There  are  customs  prevalent,  esta- 
blished by  precedent,  and  endorsed  by  long  usage,  which,  if  now  done  for 
the  first  time,  would  be  deemed  larceny.  The  eagles  are  gathering  together 
to-day  at  the  Federal  capital,  and  the  jobbing,  peculation,  vote-yourself-a- 
prize  system,  will  soon  be  in  full  operation.  Common  usage  has  given  to 
certain  doubtful  practices  the  stamp  of  legality.  He  would  be  regarded  as 
very  verdant,  and  exceedingly  unsophisticated,  who  should  presume  to  call 
things  by  their  right  names  in  Washington,  or  to  hint  that  the  private  gen- 
tleman who  had  so  wasteful  an  array  of  servants,  as  the  servants  of  the 
people  at  Washington,  would  forthwith  discharge  the  whole  set  without  a 
character.  The  treasury,  one  might  think,  is  replenished  annually  for  the 
benefit  of  these  gentlemen.  That  they  themselves  think  so,  is  palpable. — 
From  this  centre,  the  idea  of  official  honesty,  in  States  and  municipalities, 
seems  to  have  taken  a  like  latitudinarian  range.  The  finances  of  some  of 
our  cities  are  managed  in  a  most  unaccountable  manner  —  literally  unac- 
countable, for  no  accounts  are  rendered.  Immense  sums  disappear,  taxation 
annually  increases,  and  the  deficit  keeps  pace  with  the  sums  assessed.  The 
public  credit  is  shaken,  municipal  evidences  of  debt  are  dishonored,  neces- 
sary public  works  stand  still,  repudiation  is  practically  attempted,  and  all 
this  time  enough  is  squandered,  and  disappears  by  peculation,  to  keep 
the  treasury  more  than  ready  for  the  lawful  demands  upon  it."  —  North 
American. 


PRESIDENT    OF    THE    UNITED    STATES.  23 

followed  by  indignant  denunciation  of  both  banks  and  notes,  and 
by  the  establishment  of  a  department  in  the  national  treasury,  for 
the  supervision  of  local  banks,  from  which  is  issued,  annually,  an 
enormous  mass  of  figures,  arranged  with  the  intent  to  deceive  their 
readers  into  the  belief,  that  those  who  place  confidence  in  banks 
will  be  defrauded.  Look,  next,  to  the  speculations  in  public 
lands,  which  always  follow  the  adoption  of  a  policy  tending 
towards  the  closing  of  our  factories  and  furnaces,  and  thus 
enable  gamblers  and  speculators  to  accumulate  fortunes,  at  the 
expense  of  the  poor  emigrants  who  are  driven  from  the  older 
States.  Look,  again,  to  the  enormous  changes  in  the  value  of 
property  of  every  description,  resulting  from  the  three  suspen- 
sions, in  time  of  peace,  that  have  followed  the  centralization 
of  the  monetary  power  in  the  hands  of  the  Federal  executive. 
Look,  then,  to  the  facts,  that  "free  trade,"  the  control  of  the 
central  government  over  the  currency,  and  the  doctrine  that  "to 
the  victors  belong  the  spoils,"  had  their  origin  at  the  self-same 
period.  Further,  look  to  the  fact,  that  an  ad  valorem  system, 
offering,  as  it  does,  a  bounty  upon  the  perpetration  of  fraud, 
drives  the  honest  merchant  from  the  business  of  importation. 
Look,  I  pray  you,  to  the  great  fact,  that,  since  the  day  on  which 
the  centralized  system  was  adopted,  the  expenditures  of  the 
government  have  been  quintupled  —  and  that  nearly  seventy  mil- 
lions of  dollars,  per  annum,  are  now,  at  every  election,  put  up 
to  the  highest  bidder.  Look  at  the  enormous  changes  in  the 
prices  of  all  our  staples,  consequent  upon  that  exclusive  depend- 
ence upon  foreign  markets,  which  it  is  the  object  of  the  centralized 
system  to  establish.  Look  at  the  gambling  spirit,  and  the  reck- 
lessness thereby  engendered,  and  you  will  be  at  no  loss  to  account 
for  the  demoralization  that  is  in  progress  —  a  demoralization 
whose  growth  has,  in  the  last  few  years,  been  more  rapid,  than  in 
that  of  any  country  recorded  in  the  history  of  the  world.  Having 
studied  these  things,  Mr.  President,  you  will,  I  think,  be  disposed 
to  agree  with  me  in  opinion,  that  while  the  central  government 
shall  continue  to  pursue  a  course  that,  in  effect,  offers  boun- 
ties for  the  perpetration  of  frauds  and  villanies,  there  can  be  no 
hope  of  change ;  and  that,  unless  there  be  a  change,  the  day  must 
speedily  arrive,  when  the  people,  in  their  distress,  will  be  found 
calling  upon  Providence,  in  its  mercy,  to  send  them  a  dictator, 
and  thus  relieve  them  from  the  oppression  of  that  worst  of  all 
despotisms,  a  centralized  democracy. 

Hoping,  Mr.  President,  that,  under  reforms  that  you  may  insti- 
tute, the  State  authorities  may  become  re-instated  in  the  posses- 
sion of  the  powers  of  which  they  have  been  deprived,  and  that  we 
may  thus  be  enabled  to  retrieve  our  reputation, 

I  remain,  very  respectfully,  your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  December  28th,  1857. 


24  LETTERS  TO   THE 


LETTER    FIFTH. 


JUNIUS  tells  us,  Mr.  President,  that  ' '  the  ruin  or  prosperity 
of  a  state  depends  so  much  upon  the  administration  of  its  govern- 
ment, that  to  be  acquainted  with  the  merit  of  a  ministry  we  need 
only  observe  the  condition  of  the  people.  If,"  as  he  continues, 
"we  see  them  obedient  to  the  laws,  prosperous  in  their  industry, 
united  at  home  and  respected  abroad,  we  may  reasonably  pre- 
sume that  their  affairs  are  conducted  by  men  of  experience,  abili- 
ties, and  virtue.  If,  on  the  contrary,  we  see  a  universal  spirit 
of  distrust  and  dissatisfaction,  a  rapid  decay  of  trade,  dissensions 
in  all  parts  of  the  empire,  and  a  total  loss  of  respect  in  the  eyes 
of  foreign  powers,  we  may  pronounce,  without  hesitation,  that 
the  government  of  that  country  is  weak,  distracted,  and  corrupt." 

The  first  of  the  pictures  here  presented  exhibits  the  state  of  the 
American  Union  at  the  close  of  the  war  in  1815  ;  again  in  1834, 
at  the  date  of  the  repeal  of  the  protective  tariff  of  1828  ;  and 
again  in  1847,  when  the  act  of  1842  ceased  to  be  the  law  of  the 
land.  The  second  is  found  on  an  examination  of  the  condition 
of  the  country,  in  the  period  from  1818  to  1824,  when  protection 
had  ceased,  and  when  the  legislatures  of  numerous  States  had 
found  themselves  compelled  to  stay  the  action  of  the  laws  for  the 
collection  of  debts;  again  in  1841-2,  when  "  stay  laws  "  were 
again  resorted  to,  and  when  the  Federal  goverrnment  was  nearly 
bankrupt ;  and,  lastly,  at  the  present  period,  when  there  reigns 
"a  universal  spirit  of  distrust  and  dissatisfaction  "  —  when  there 
are  "dissensions  in  every  part  of  the  empire"  —  and  when  the 
' '  respect  of  other  powers ' '  has  so  nearly  ceased  to  have  exist- 
ence. 

In  proof  that  such  is  the  case,  and,  that  the  Union  is  rapidly 
declining  in  the  estimation  of  the  people  of  other  nations,  I  beg 
to  offer  you  the  following  extract  from  a  work  just  published,  the 
author  of  which  is  not  to  be  suspected  of  any  disposition  to  mag- 
nify the  changes  he  discovered  :  — 

"It  is  very  evident,  as  I  converse  with  people  here,  and  in 
other  parts  of  Northern  Europe,  that  a  great  change  has  come 
over  the  popular  feeling  towards  America,  since  I  was  last  on  the 
Continent,  five  years  ago.  Then  America  was  the  ideal  every- 
where to  free-thinking  and  aspiring  men.  The  oppressed  looked 
hopefully  to  it ;  the  philosopher  found  the  confirmation  of  his 
theories  of  human  liberty  there ;  the  hard-working,  the  politically 
degraded,  the  idealists,  the  struggling  masses,  felt  that  the  West- 
ern Republic  was  especially  for  them,  and  even  if  they  could  never 
share  its  privileges,  they  were  happy  that  humanity  had  at  length 
looked  on  such  a  glorious  effort.  The  reports  of  the  common 


PRESIDENT   OF  THE   UNITED   STATES.         »  25 

freedom,  of  the  education  of  the  masses,  of  the  high  morality  pre- 
vailing, came  over  even  exaggerated,  and  silenced  the  enemies 
of  popular  rights,  and  converted  many  doubtful.  One  felt  the 
effect  of  all  this,  as  a  traveller.  You  were  not  alone  ;  you  were 
the  representative  of  the  best  thoughts  and  aspirations  of  man- 
kind. The  warm  hand  grasping  yours,  welcomed  not  you,  but  a 
nation  of  freemen.  The  rich  did  not  condemn,  because  property 
and  person  had  been  better  shielded  under  the  Republic,  than 
under  European  monarchies.  The  poor,  the  laborers,  were  espe- 
cially your  friends,  for  was  not  your  land  the  very  land  which 
elevated  labor  ? 

"All  this  is  quite  different  now.  Yon  are  treated  politely,  as 
a  stranger ;  or  you  are  welcomed  more  or  less  for  what  you  per- 
sonally are,  but  for  your  country,  among  the  populace  you  get  no 
welcome.  The  glory  has  departed. 

"Within  five  years,  various  circumstances  have  opened  the 
eyes  of  Europe  to  our  real  situation,  and,  as  often  happens,  the 
people  see  nothing  but  our  sins.  We  are  simply  now  a  tricky, 
jobbing,  half-barbaric  people,  where  the  worst  political  corrup- 
tion of  the  Old  World  extsts  without  its  refinement ;  and  where 
brutality,  rowdyism,  and  unlimited  despotism  have  in  certain 
quarters  free  play.  Our  politicians  and  diplomats  are  despised  ; 
our  Constitution  is  sneered  at,  as  inflicting  upon  us  the  most  dis- 
graceful legislators ;  and  the  laboring  class  and  the  democrats 
know  that  within  our  limits,  a  more  abominable  tyranny  over 
labor  and  free  speech  and  thought  exists,  than  the  worst  despot- 
isms of  the  Continent  ever  exhibited.  There  is  nothing  now  in 
our  situation  to  dazzle  the  world.  They  see  with  clear  eye  our 
blackest  sins  and  our  miserable  political  jobbing."  * 

Such  being  the  state  of  things  in  Northern,  we  may  now  look 
to  Central  Europe,  in  regard  to  which,  I,  myself,  Mr.  President, 
can  speak.  Go  where  the  traveller  may,  he  finds,  among  thought- 
ful men  —  among  those  who  had  hoped  to  find,  in  this  western 
world,  the  realization  of  their  brightest  hopes,  in  regard  to  man's 
onward  progress  —  a  growing  doubt  in  reference  to  our  future. 
Anxiously  do  they  look  across  the  ocean  —  dreading  to  hear  of 
new,  and  more  alarming,  riots  —  new  civil  wars  —  new  violations 
of  local  rights  —  new  marauding  expeditions  —  new  aggressive 
wars.  Ten  years  since,  all  was  different.  They  would,  then, 
have  regarded  as  a  false  prophet,  the  man  who  had  predicted : 

That,  at  the  close  of  a  single  decade,  the  regular  expenditures 
of  the  Federal  government,  in  a  time  of  peace,  would  reach  seventy 
millions  of  dollars  —  being  five  times  more  than  they  had  been,  but 
thirty  years  before : 

That  the  recipients  of  this  large  amount,  whether  contractors, 
clerks,  or  postmasters,  would  be  held  liable  for  the  payment  of  a 

*  Brace.—"  The  Norse  Folk,"  page  24. 


26  LETTERS   TO   THE 

formal  and  regular  assessment,  to  be  applied  to  the  maintenance 
in  office,  of  the  men  by  whom  they  had  been  appointed,  or  those 
by  whom  the  contracts  had  been  made  : 

That  payment  of  these  assessments,  would  be  made  the  condi- 
tion upon  which  their  own  continuance  in  office  should  depend  : 

That,  coincident  with  these  demands  upon  the  employes  of  the 
government,  all  salaries  would  be  largely  raised ;  and  that,  thus, 
the  treasury  should  be  heavily  taxed  for  purely  party  purposes, 
and  for  the  promotion  of  private  interests  : 

That  centralization  would  be  so  far  perfected,  as  to  enable  the 
Executive  to  dictate  to  a  body  of  officials,  sixty  or  eighty  thousand 
in  number,  all  their  modes  of  thought,  in  reference  to  questions 
of  public  interest : 

That  a  constantly  growing  difficulty  of  obtaining  —  independent 
of  the  government  —  the  means  of  support,  and  constant  increase 
in  the  rewards  of  public  service,  would  be  attended  with  corre- 
sponding increase  in  the  number  of  claimants  for  office,  and  in 
their  subservience  to  the  men  at  whose  pleasure  offices  were  held  : 

That  the  Executive  would  dictate  to  members  of  Congress 
what  should  be  their  course,  and  publicly  advertise  the  offices  that 
were  to  be  given,  to  those  whose  votes  should  be  in  accordance 
•with  his  desires : 

That  the  growing  mental  slavery  thus  indicated,  would  be  at- 
tended by  corresponding  growth  in  the  belief,  that  "one  of  the 
chief  bulwarks  of  our  institutions,"  was  to  be  found  in  the  physical 
enslavement  of  the  laborer : 

That  the  extension  of  the  area  of  human  slavery  would  have 
become  the  primary  object  of  the  government ;  and  that,  with  that 
view,  the  great  Ordinance  of  1787,  as  carried  out  in  the  Missouri 
Compromise,  would  be  repealed  :  - 

That,  for  the  promotion  of  this  object,  the  treaties  with  the  poor 
remnants  of  the  native  tribes  would  all  be  violated : 

That,  with  the  same  end  in  view,  wars  would  be  made,  piracy 
encouraged,  and  territories  purchased  : 

That  the  Executive  power  would  so  far  have  grown,  as  to  enable 
it  to  adopt  measures  provocative  of  war,  with  a  view  to  the  spoli- 
ation of  the  weaker  neighbors  of  the  Union  : 

That  it  would  be  officially  declared  that  might  makes  right, 
and  that,  if  a  neighboring  power  refused  to  sell  the  territory 
whose  possession  was  desired,  the  Union  would  then  be  justified 
in  seizing  it : 

That  the  reopening  of  the  slave  trade  would  be  publicly  advo- 
cated, and  that  the  first  step  towards  its  accomplishment  would 
be  taken  by  a  citizen  of  the  United  States  —  in  rescinding  all  the 
prohibitions  of  the  Central  American  governments  : 

That  the  prohibition  of  slavery  in  a  Central  American  State, 
would  be  considered  sufficient  reason  for  the  rejection  of  a  treaty : 

That  the  substitution,  throughout  all  the  minor  employments 


PRESIDENT   OF  THE   UNITED   STATES.  27 

of  society,  of  slave  labor  for  that  of  the  freeman,  would  be  publicly 
recommended  by  the  Executive  of  a  leading  State  : 

That,  while  always  seeking  territory  in  the  South,  the  rights 
and  interests  of  the  people  would  be  bartered  away,  for  the  sole 
and  exclusive  purpose,  of  preventing  annexation  in  the  North  : 

That  it  would  be  declared,  that  the  free  navigation  of  Brazilian 
rivers  was  to  be  obtained,  ' '  amicably,  if  it  could,  forcibly,  if  it 
must": 

That  the  effect  would  now  be  seen,  in  the  entire  alienation  of 
the  other  communities  of  the  Western  world  : 

That  the  legislation  of  the  country,  would  have  fallen  almost 
entirely  under  the  control  of  navigation,  railroad,  and  other 
transportation  companies ;  and  that  legislators  would  largely  par- 
ticipate with  their  managers,  in  the  profits  of  enormous  grants  of 
money,  and  of  public  lands  : 

That  there  would  have  arisen  a  "third  house  of  Congress  " — 
composed  of  lobby  members,  and  embracing  men  who  had  filled 
almost  the  highest  legislative  and  executive  offices  —  abundantly 
supplied,  to  use  the  words  of  Colonel  Benton,  "with  the  means 
required  for  conciliating  members,  and  combining  interests,"  and 
thus  securing  the  passage  of  almost  any  bill,  the  applicants  for 
which  were  willing,  sufficiently  liberally,  to  pay : 

That  centralization  would  so  far  have  grown,  as  to  have  caused 
the  expenditures  of  a  single  city,  to  almost  equal  those  of  the 
Federal  government,  but  thirty  years  ago  : 

That  the  expenditure  of  city  revenues,  and  the  maintenance  of 
public  order,  would  be  in  the  hands  of  magistrates,  many  of  whom 
would  be  regarded  as  worthy  only  of  the  penitentiary : 

That  the  contest  for  the  distribution  of  those  revenues,  would 
become  so  fierce,  as  to  cause  the  purchase  of  votes  to  an  extent, 
and  at  a  price,  before  unknown  ;  and  that  elections  would  be  car- 
ried on  by  means  of  bowie-knives,  pistols,  and  even  by  aid  of 
cannon : 

That  Lynch  law  would  have  found  its  way  into  the  Senate 
chamber :  that  it  would  have  superseded  the  provisions  of  the 
Constitution,  throughout  the  Southern  States  :  that  it  would  have 
superseded  the  civil  authority,  in  one  of  the  States  of  the  Union  : 
that  the  right  of  the  States  to  prohibit  slavery  within  their  limits, 
would  be  so  seriously  questioned  as  to  warrant  the  belief,  that 
the  day  was  near  at  hand,  when  it  would  be  totally  denied  :  that 
all  the  decisions  of  the  Supreme  Court,  for  sixty  years,  favorable 
to  freedom,  would,  by  this  time,  have  been  reversed  :  that  the  doc- 
trine of  constructive  treason  would  be  adopted  in  Federal  courts  : 
and  that  the  rights  of  the  citizen  would  be  thus  in  equal  peril,  from 
the  extension  of  legal  authority  on  one  hand,  and  the  substitution 
of  the  law  of  force  on  the  other : 

That  polygamy  and  slavery  would  go  hand  in  hand  with  each 
other ;  and  that  the  doctrine  of  a  plurality  of  wives,  would  be  pub- 


28  LETTERS   TO   THE 

licly  proclaimed  by  men  holding  highly  important  offices  under 
the  Federal  government : 

That  manners,  morals,  or  intellect,  would  cease  to  be  deemed 
essential  to  the  representation  of  the  Union,  at  foreign  courts  : 

That  religious  discord  would  so  far  have  grown,  that  the  ques- 
tion of  the  private  opinions  of  a  candidate  for  the  presidency,  in 
regard  to  matters  of  religious  faith,  would  be  discussed  through- 
out the  Union : 

That  the  discord  between  the  Northern  and  Southern  portions 
of  the  Union  would  have  reached  the  point  of  civil  war,  attended 
with  a  growing  disposition,  in  its  various  portions,  to  look  com- 
placently upon  the  idea  of  dissolution  :  and,  finally, 

That  Germany,  divided  and  distracted  as  it  was,  before  the 
formation  of  the  Zoll-Verein,  was  likely  to  be  reproduced  in  this 
Western  world — the  Union  tending  steadily  towards  a  dissolution, 
the  result  of  which  would  be,  that  the  several  fragments  would 
become  mere  tools  in  the  hands  of  other  powers. 

This  is  a  gloomy  picture,  and  yet  it  is  a  true  one.  Not  one  of 
these  things  would,  a  few  years  since,  have  been  believed  to  be  of 
possible  occurrence  ;  and  yet,  with  the  exception  of  this  last,  they 
are,  one  and  all,  now  matters  of  history. 

How  they  have  tended  to  the  production  of  changes  in  the 
modes  of  European  thought,  is  exhibited,  Mr.  President,  in  a  recent 
British  journal,  in  which,  after  showing,  that  the  idea  of  the  vote 
by  ballot,  of  "  manhood  suffrage,"  and  of  "household  suffrage," 
had  nearly  passed  away,  the  writer  proceeds  to  say  that  — 

"  This  revulsion  of  sentiment  and  opinion  is  in  a  great  measure 
traceable  to  the  spectacle  of  the  American  democracy.  We  owe 
a  deep  debt  of  gratitude  to  the  United  States  for  the  pregnant  les- 
sons they  have  taught  us,  and  the  timely  warnings  they  have 
given.  *  *  *  A  few  years  ago  the  substantial,  deep-seated, 
long-descended  fabric  of  English  liberty  was  in  danger  from  the 
blind  but  honest  enthusiasm  of  the  sincere  friends  of  popular  insti- 
tutions :  now,  if  we  succumb  to  that  peril,  we  shall  be  wrecked 
with  our  eyes  open.  The  tide  has  somewhat  ebbed,  and  the  rock 
is  above  water.  Let  us  inquire  a  little  more  in  detail  what  the 
warnings  that  have  come  to  us  across  the  Atlantic  are." 

The  time  has  been,  Mr.  President,  when  you  and  I,  and  all  of 
us,  were  accustomed  to  believe,  that  the  great  republic  of  the 
West  was  to  be  the  pillar  of  light,  guiding  the  oppressed  of  the 
world  in  their  search  for  freedom.  Widely  different  from  this,  it 
has,  as  here  is  shown,  become  the  beacon  light,  whose  only  use  is 
that  of  warning  the  world,  against  the  shoals  and  sands,  among 
which  our  ship  is  likely  to  be  wrecked.  Turn  back,  Mr.  Presi- 
dent, a  little  in  our  history  —  finding  the  pages  in  which  are 
recorded  the  early  efforts  of  the  central  power  to  obtain  direction 
of  the  currency,  and  you  will,  as  I  think,  find  the  origin  of  all 
these  changes.  From  that  day  to  the  present  one,  with  slight 


PRESIDENT   OF   THE    UNITED    STATES.  29 

exceptions,  centralization  has  grown  steadily;  and  yet,  strange 
as  it  may  appear  in  a  patriot  like  yourself,  the  whole  tendency  of 
your  message,  is  in  the  direction  of  further  centralization. 

The  more  perfect  the  form  of  the  ship,  the  more  rapid  will  be 
her  passage  through  the  water,  and  the  more  certainly  and 
speedily  will  she,  under  proper  guidance,  reach  her  destined  port. 
The  more  rapid  and  complete,  however,  will  be  her  destruction, 
should  her  pilot  run  her  upon  the  rocks  that  lie  in  her  course  — 
the  reaction  then  produced,  being  in  the  direct  ratio  of  her  pre- 
vious action.  So  is  it  with  nations.  The  higher  their  organiza- 
tion, the  more  rapid  is  the  movement  of  society,  and  the  more 
instant  is  the  shock  that  attends  a  stoppage  in  the  circulation. 
The  passage  of  an  invading  army  through  Peru,  or  Mexico,  pro- 
duces little  effect,  beyond  a  small  destruction  of  life  and  property ; 
but  a  similar  event  in  England,  would  cause  the  closing  of  fac- 
tories, the  stoppage  of  mills  and  furnaces,  the  abandonment  of 
mines,  the  dispersion  of  the  people,  and  the  suspension  of  all  the 
machinery  of  local  government.  The  power  of  recuperation 
exists,  however,  in  the  same  degree  —  the  recovery  from  the 
effects  of  war,  in  countries  like  France  or  England,  being  much 
more  rapid  than  it  can  be,  where  the  societary  circulation  is  lan- 
guid, and  where  the  waste  of  property,  or  of  population,  can 
slowly,  if  even  at  all,  be  repaired. 

In  no  country  of  the  world,  do  the  effects  of  change  become 
so  promptly  obvious,  as  among  ourselves ;  and  for  the  reason, 
that — the  political  organization  being  here  more  natural  than  in 
any  other — the  tendency  to  rapidity  of  circulation  is  so  very  great. 
Universal  instruction  throughout  the  northern  portion  of  the  Union, 
tends  to  the  production  of  great  mental  activity ;  and,  whatever 
may  be  the  direction  in  which  the  ship  of  State  is  guided,  the 
movement  towards  the  rocks  on  the  one  hand,  or  the  haven  on 
the  other,  is  here  most  rapid.  Such  being  the  case,  it  is  easy  to 
account  for  the  sudden  and  extraordinary  changes,  that  are  here 
exhibited,  and,  that  so  much  surprise  the  people  of  other  lands. 
In  the  decade  that  followed  the  passage  of  the  tariff  of  1824, 
there  was  effected  a  greater  improvement  than  had  ever  before 
been  witnessed  in  any  country  —  the  people  having  passed  from  a 
state  of  poverty  to  one  of  wealth  —  the  country  having  become  so 
attractive,  as  to  cause,  in  the  following  years,  a  vast  increase  of 
immigration  —  and  the  government  having  passed  from  a  condi- 
tion in  which  it  required,  for  its  support,  to  bor»ow  money,  to 
one  in  which  —  the  public  debt  having  been  extinguished  —  it 
became  necessary  to  emancipate  from  duty  all  the  commodities 
that  did  not  enter  into  competition  with  those  produced  at  home. 
Nevertheless,  but  seven  years  later,  the  people  and  the  govern- 
ment, both,  were  bankrupt ;  the  circulation  of  society  had  almost 
stopped ;  and  pauperism,  to  an  extent  that  was  alarming,  pre- 
vailed throughout  the  country.  The  cause  of  this  was  to  be 


30  LETTERS   TO   THE 

found  in  the  fact  that  protection  had  been  abandoned.  Again, 
in  1842,  the  system  was  changed;  and,  before  the  close  of  the 
first  five  years,  the  whole  appearance  of  the  country  was  changed 
—  the  circulation  of  society  having  become  rapid,  the  credit  of 
the  people  and  the  government  having  been  restored,  and  the 
country  having  once  more  been  rendered  so  attractive  as  to  cause 
a  large  increase  of  immigration.  Again,  at  the  close  of  1846, 
was  the  system  changed  —  protection  having  been  then  aban- 
doned, and  free  trade  then  again  inaugurated  into  power ;  and 
now,  at  the  close  of  the  first  decade,  we  witness  a  decline  more 
rapid,  and  more  pervading,  than  is  recorded  in  the  history  of  any 
country  of  the  world. 

Why  it  is,  that  such  are  the  effects  produced,  will  be  shown  in 
another    letter,  from 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 

Philadelphia,  December  30th,  1857. 


PRESIDENT   OF   THE   UNITED    STATES. 


31 


LETTER    SIXTH. 


BEFORE  proceeding,  Mr.  President,  to  an  examination  of  the 
manner  in  which  the  policy  of  the  central  government  has  tended 
towards  producing  the  demoralization,  that  has  now  become  so 
clearly  manifest,  I  would  beg  to  call  your  attention  to  a  simple, 
but  highly  important,  principle  of  social  science,  which  may  thus 
be  stated  : 

A  thousand  tons  of  rags,  at  the  Rocky  Mountains,  would  not 
exchange  for  a  piece  of  silver  of  the  smallest  conceivable  size ; 
whereas,  a  quire  of  paper  would  command  a  piece  so  large,  that 
it  would  weigh  an  ounce.  Passing  thence  eastward,  and  arriving 
in  the  plains  of  Kansas,  their  relative  values,  measured  in  silver, 
would  be  found  to  have  changed  so  much,  that  the  price  of  the 
rags  would  pay  for  many  reams  of  paper.  Coming  to  St.  Louis, 
a  further  change  would  be  experienced — rags  having  again  risen, 
and  paper  having  again  fallen.  Such,  too,  would  prove  to  be 
the  case,  at  every  stage  of  the  progress  eastward  —  the  raw  ma- 
terial steadily  gaining,  and  the  finished  commodity  losing,  in  price, 
until,  at  length,  in  the  heart  of  Massachusetts,  three  pounds  of 
rags  would  be  found  to  command  more  silver  than  would  be 
needed  for  the  purchase  of  a  pound  of  paper.  The  changes  of 
relation  thus  observed,  are  exhibited  in  the  following  diagram  : — 


Paper. 
Cloth. " 


Rags 
Cotton. 


Paper. 
Cloth. 

— — 

Massachusetts. 


Hags. 
Cotton. 


The  price  of  raw  materials  tends,  thus,  to  rise,  as  we  approach 
those  places  in  which  wealth  most  exists  —  those  in  which  man  is 
most  enabled  to  associate  with  his  fellow-man,  for  obtaining 
power  to  direct  the  forces  of  nature  to  his  service.  The  prices  of 
finished  commodities,  move  in  a  direction  exactly  opposite  — 
tending,  always,  to  decline  as  those  of  raw  materials  advance. 
Both  tend,  thus,  to  approximate  —  the  highest  prices  of  the  one, 
being  always  found  in  connection  with  the  lowest  of  the  other ; 
and,  in  the  strength  of  the  movement  in  that  direction,  is 
found  the  most  conclusive  evidence  of  advancing  civilization, 
and  growing  commerce. 

The  tendency  towards  advance  in  civilization  being  thus,  Mr. 


32 


LETTERS   TO   THE 


President,  everywhere,  in  the  direct  ratio  of  the  approximation 
of  the  prices  of  the  rude  products  of  the  earth,  and  those  of  the 
commodities  into  which  they  are  converted,  the  test  of  the  value 
of  every  measure,  is  to  be  found  in  its  tendency  to  produce,  or  to 
prevent,  that  approximation.  So  examined,  the  protection  ex- 
tended to  shipping,  would  appear  to  have  been  productive  of  un- 
mixed good  —  ships  having  steadily  become  cheaper,  while  ship- 
limber  has  as  steadily  become  dearer ;  and  the  farmer  having 
found  freights  declining  from  year  to  year,  while  a  market  was 
being  made  for  portions  of  his  trees,  that,  otherwise,  would  have 
been  wholly  valueless. 

With  regard  to  the  products  of  the  labor  given  to  cultivation 
— that  labor  which,  when  properly  directed,  tends  most  to  expand 
the  mind  and  improve  the  heart — it  has  been  otherwise ;  and  be- 
cause, the  policy  of  the  country  has  looked  almost  entirely  to 
foreign  trade,  to  the  exclusion  of  all  measures  tending  to  the  pro- 
motion of  internal  commerce.  The  prices  of  raw  material  have 
steadily  declined ;  and,  for  the  reason,  that  the  obstacles  to  com- 
merce have  increased,  when  they  should  have  diminished. 

The  average  export  price  of  flour,  since  the  commencement  of 
the  present  century,  has  been  as  follows  : — 


Five  years  ending  in 

1805 

1810 

1815 

1820 

1825 

1830 

1835.... 


Dollars. 
..  9.05 
.  7.50 
,.11.60 
,.  9.15 
..  6.20 
..  6.20 
,.  5.70 


Five  years  ending  in  Dollars. 

1840 7.87 

1845 5.00 

1850 5.54 

Year  1850 5.00 

«     1851 4.77 

"     1852 4.24 


The  facts  here  presented,  being  most  remarkable,  are  worthy, 
Mr.  President,  of  your  most  serious  attention.  The  highest 
average  is  found  in  the  period  from  1810  to  1815  ;  that  one,  in 
which  there  was,  almost  literally,  no  intercourse  with  foreign 
countries ;  and  that,  in  which  the  energies  of  the  country  were, 
more  than  they  ever  before  had  been,  directed  towards  the  estab- 
lishment of  internal  commerce.*  A  domestic  market  was  then 
rapidly  being  created,  the  extent  of  which  may  be  judged  from 
the  fact,  that  the  cotton  manufacture,  which,  in  1805,  had  required 
but  a  single  thousand  bales,  absorbed,  in  1815,  no  less  than 
90,000.t 

*  In  the  last  of  these  years,  only,  it  was,  that  gold  and  silver  coin  had 
ceased  to  circulate,  because  of  difficulties  resulting  from  the  events  of  the 
war.  The  stoppage  took  place  in  the  autumn  of  1814,  and  the  Treasury 
year  closes  with  the  autumn  of  1815.  That,  however,  was  one  of  the 
lowest  years  of  the  period. 

•(•  Report  of  the  Committee  of  Commerce  and  Manufactures,  February  13,  1816. 
The  effect  of  this  large  domestic  demand,  upon  the  price  of  cotton,  is  shown 


PRESIDENT   OF   THE    UNITED   STATES.  33 

With  the  return  of  peace,  however,  the  policy  of  the  country 
was  changed,  and  from  the  date  of  that  change,  we  have  an 
almost  unbroken  descent,  until,  in  1852,  just  prior  to  the  opening 
of  the  Crimean  war,  it  had  reached  the  lowest  point  of  the  cen- 
tury ;  and  probably  the  lowest  recorded  in  the  country's  history 

—  thus  proving  a  constant  increase  in  the  obstacles  standing  be- 
tween the  man  who  raised  the  wheat,  and  him  who  had  money 
with  which  to  purchase  it.     Directly  the  reverse  of  this,  is  what 
\ve  see  to  have  occurred  in  France,  where  the  average  price  of 
wheat  for  thirty-five  years,  ending  with  1848,  remained  almost 
stationary,  although  somewhat  higher  in  the  closing  period  than 
in  the  earlier  ones.     So,  too,  with  both  Russia  and  Northern 
Germany,  in  the  first  of  which,  the  price  of  corn,  in  the  decade 
ending  in  1852,  was  one-half  higher  than  it  had  been,  in  that 
ending  in  1825  ;  while  in  the  last,  we  find  the  average  maintained 
with  a  steadiness  contrasting  strikingly,  with  the  extraordinary 
changes  occurring  among  ourselves,  as  here  is  shown  : — 

Average  of  wheat  Average  of  flour 

in  Prussia,  per  scheffel.*  exported  from  U.  S. 

1816-25   66{|  groschen  =  $1.48  $7.57 

1826-35  55^        "        =    1.23  5.95 

1836-45  62^        "        =    1.39  6.43 

1845-51   78T9T        "        =    1.63  5.41 

1852       ' 68/5        •'        =    L51   4-24 

In  the  one,  the  price,  towards  the  close,  is  higher  than  in  the 
preceding  periods  ;  while  in  the  other,  it  has  fallen  to  little  more 
than  half. 

The  course  of  events  in  the  advancing  countries  of  Europe  — 
those  which  are  following  in  the  lead  of  Colbert,  and  of  France 

—  is,  therefore,  exactly  the  opposite  of  what  is  here  observed ; 
but  if  we  seek  a  case  that  is  exactly  parallel,  it  will  be  found  in 
studying  the  operations  of  Ireland  or  India,  Portugal  or  Turkey 
— countries  which  follow  in  the  lead  of  England.     In  all  of  these, 
the  prices  of  raw  products,  and  those  of  finished  commodities, 
are  steadily  receding  from  each  other,  with  constant  decline  in  the 
value  of  land  ^and  man,  and  constantly  augmenting  difficulty  in 
obtaining  the  food  and   clothing   required  for  man's  support. 
Like  these  United  States,  they  are  becoming  from  year  to  year 
more  dependent  upon  foreign  trade,  and  less  able  to  maintain 
commerce  among  themselves. 

Turning  now,  Mr.  President,  to  the  England  of  a  century 
since,  we  find  a  precisely  similar  state  of  facts,  and  resulting,  too, 

by  the  fact,  that  the  average  value  of  the  cotton  exports  of  1815  and  1816 
exceeded  $24,000,000;  whereas,  three  years  later,  when  the  domestic  manu- 
facture had  almost  disappeared,  it  sunk  to  $20,000,000. — Treasury  Report, 
February  20,  1836. 

*  A  scheffel  is  1  y5^  bushels, 
o 


34  LETTERS   TO   THE 

from  causes  precisely  similar  —  a  growing  dependence  on  distant 
markets,  attended  with  increased  necessity  for  the  use  of  machi- 
nery of  transportation  —  ships  and  wagons,  sailors  and  wagon- 
drivers.  The  price  of  wheat  fell  there,  regularly,  until,  at  length, 
it  reached  the  very  low  point  of  21s.  od.  per  quarter,  or  little 
more  than  half  a  dollar  a  bushel  —  manufactures  remaining  high 
in  price.  So  soon,  however,  as  a  market  had  been  made  at  home, 
the  price  rose  —  nearly  doubling  in  the  very  first  decade,  and  fur- 
ther advancing  to  an  average  of  51s.  3d. ;  at  or  near  which  point, 
it  remained  for  fivc-and-twenty  years.  Cloth  and  iron,  during  all 
that  time,  were  becoming  cheaper  —  thus  presenting,  in  the  con- 
stant approximation  of  prices,  the  most  unquestionable  of  all  the 
evidences  of  advancing  civilization. 

The  whole  quantity  of  food  for  which  Great  Britain  then  needed 
a  foreign  market  was  trivial  to  a  degree  —  the  average  export  in 
the  decade  ending  in  1755,  when  the  price  was  lowest,  having 
been  only  4,000,000  of  bushels;  and  yet,  small  as  it  was,  the 
necessity  for  going  abroad  to  sell  it,  produced  the  whole  of  the 
effect  above  described.  The  regulating  market  of  that  day,  having 
been  the  country  on  the  Rhine  —  then  the  great  seat  of  manufac- 
tures— the  more  that  was  sent  to  it,  the  lower  was  there  the  price, 
and  the  lower  that  which  could  be  obtained  at  the  place  of  pro- 
duction. The  4,000,000  of  bushels  thrown  upon  that  market 
must  have  caused  a  reduction  there,  of  not  less  than  10,  and  more 
probably  15,  per  cent.  ;  and  that  reduction  extended  itself  to  the 
whole  British  crop,  whatever  was  its  size.  So  soon,  however, 
as  a  market  had  been  made  at  home,  British  corn  —  ceasing  to  go 
abroad  —  ceased  to  affect  the  prices  of  foreign  markets  ;  and  then 
British  prices  rose  to  the  extent  we  see  them  to  have  done,  because 
of  the  double  saving  to  the  farmer  from  the  diminution  in  the  cost 
of  transportation,  and  from  the  increase  of  prices  in  all  the  mar- 
kets of  Continental  Europe,  from  which  supplies  might  otherwise 
have  been  drawn.  The  amount  of  that  saving,  probably,  was 
$100,000,000  ;  and  it  was  the  effect  of  an  increase  in  the  rapidity 
of  the  societary  circulation  effected,  in  the  short  space  of  twenty 
years,  by  the  very  simple  process  of  bringing  the  consumer  to  the 
side  of  the  producer. 

Look  where  we  may,  Mr.  President,  we  find,  that  men  become 
more  civilized,  as  the  prices  of  raw  materials  tend  to  rise,  and  to 
approximate  more  nearly  to  those  of  the  finished  commodities 
required  for  man's  consumption.  Such  being  the  fact,  and  our 
policy  tending  steadily  in  the  reverse  direction,  you  can  readily 
account  for  the  daily  growing  tendency,  among  ourselves,  towards 
centralization  and  slavery,  with  their  attendant  demoralization. 
For  further  facts  in  reference  to  this  great  question,  I  must,  how- 
ever, refer  you  to  another  letter. 

Yours,  with  great  respect, 

HENRY  C.  CAREY. 

Philadelphia,  January  1st,  1858. 


PRESIDENT   OF   THE   UNITED    STATES.  35 


LETTER    SEVENTH. 

No  truth  in  science,  Mr.  President,  is  more  readily  susceptible 
of  demonstration,  than  that  of  the  liability  of  the  man  who  must 
go  to  market,  for  the  payment  of  the  cost  of  getting  there.  It  is 
one,  which  sad  experience  teaches  every  farmer;  and  one,  too, 
that  the  student  may  find  demonstrated  by  Adam  Smith.  The 
corn  that  is  twenty  or  thirty  miles  distant  from  market,  sells  for 
as  many  cents  less,  per  bushel,  than  that  which  is  close  to  mar- 
ket ;  and  the  potatoes  that  are  a  hundred  miles  from  market,  are 
almost  worthless  ;  while  those  raised  near  it,  sell  for  thirty  or  forty 
cents  a  bushel — the  difference  between  the  two,  being  the  tax  of 
transportation. 

Another  and  equally  important  truth  is,  that  the  price  of  the 
whole  crop  is  dependent  upon  that  which  can  be  obtained  for  the 
little  surplus  that  must  go  abroad  ;  or  paid,  for  the  small  quantity 
that  must  be  brought  from  a  distance.  Give  to  any  certain  dis- 
trict 10,000  bushels  of  wheat,  more  than  is  there  required,  and 
the  crop  will  fall  to  the  level  of  the  price  that  can  be  obtained 
abroad,  for  those  few  bushels — although  constituting,  perhaps, 
but  3  per  cent,  of  the  whole.  Let  the  same  district,  in  the  fol- 
lowing year,  require  10,000  additional  bushels,  and  the  whole  will 
rise  to  the  level  of  the  price  at  which  they  can  be  obtained  —  the 
difference  between  the  two  being,  perhaps,  as  follows  :  — 

Admitting  the  crop  to  be  300,000  bushels,  and  that  the  price,  -when 

there  is  neither  surplus  nor  deficiency,  is  $1 — the  product  is.  $300,000 

The  crop  being  larger,  and  a  surplus  requiring  to  be  sent  to  a  dis- 
tance, the  price  will  fall  to  75  cents  —  giving  for  310,000 
bushels 232,500 

The  crop  being  small,  and  10,000  bushels  being  required  from  a 

distance,  the  price  will  be  $1.25— giving  for  290,000  bushels.  362,500 

The  question  here,  between  a  high  and  a  low  price  —  differing 
to  the  extent  of  66f  per  cent. — is  dependent,  altogether,  upon  the 
existence  of  a  demand  slightly  below,  or  above,  the  quantity  pro- 
duced. The  former  was  the  condition  of  the  people  of  Great 
Britain,  at  the  period  referred  to  —  the  supply  having  been 
slightly  in  excess  of  the  demand,  and  that  excess  compelling  them 
to  go  to  a  distant  market,  with  some  2  or  3  per  cent,  of  the  crop, 
the  price  received  for  which,  fixed  the  price  of  all.  They,  them- 
selves, too,  were  constantly  aiding  in  the  depression  of  prices  in 
that  market,  and  the  more  they  sent  the  less  they  obtained  for  it. 
So  long  as  the  prices  in  the  home  market  were  regulated  by 


36  LETTERS    TO    THE 

those  in  the  foreign  one,  it  would  have  been  more  profitable  to 
them,  to  have  thrown  the  surplus  into  the  oceaii  than  to  have 
sold  it. 

Identical  with  this,  is  now  the  condition  of  the  American 
farmer;  and  therefore  it  is,  that  while  the  price  of  food  —  the 
raw  material  of  labor  —  is  steadily  rising  in  France,  Denmark, 
Germany,  Spain,  and  Russia,  it  here  as  steadily  declines.  Simi- 
lar, too,  is  their  condition  in  this,  that  the  whole  quantity  for 
which  a  foreign  market  must  be  found,  is  so  small  that,  were  it 
altogether  wasted,  the  loss  would  be  unfelt.  Its  waste,  indeed,  would 
be  productive  of  great  advantage  to  the  farmer ;  for,  so  long  as 
all  domestic  prices  are  fixed  by  foreign  markets,  the  effect  of  this 
trivial  export,  in  crushing  the  foreign  farmers,  by  a  reduction  of 
their  prices,  is  accompanied  by  corresponding  reduction  of  the 
domestic  ones  —  the  loss  thence  arising,  extending  itself  to  the 
whole  of  the  food  produced. 

The  total  amount  of  food  of  all  descriptions,  exported  from  the 
United  States,  and  the  prices  of  flour  at  the  corresponding  dates, 
have  been  as  follows  :  — 

Period.  Ayerage  export.                                     Price  of  flour. 

1821-15  $13,000.000  $6.20 

1826-30  12,000,000  6.20 

1831-35  14.000,000  5.95 

1830-40 12,500,000  8.00* 

1841-45  16,000.000  5.16 

1846-50  39,000,000  (Irish  famine) 5.44 

1850        26,000,000  5.00 

1851         22,000.000  4.73 

26,000,000  4.24 


We  have,  here,  a  constantly  growing  necessity  for  resorting  to  a 
distant  market,  accompanied  by  a  decline  of  prices  amounting  to 
35  per  cent.  ;  but,  if  we  compare  1850-52  with  the  period  from 
1810  to  1815,  when  the  home  consumption  was  equal  to  the  whole 
supply,  the  reduction  is  no  less  than  63  per  cent.  Admitting,  how- 

*  The  facts  of  the  last  three  years  correspond  precisely  with  those  which 
occurred  in  the  period  from  1836  to  1840,  when  the  price  of  flour,  for  the 
moment,  ranged  so  high,  preparatory  to  the  great  fall  that  was  so  soon  after 
to  take  place.  Then,  as  now,  mills  and  furnaces  had  ceased  to  be  built. 
Then,  as  now,  emigration  to  the  West  was  immense,  and  the  combined  force 
of  the  nation  was  being  given  to  the  creation  of  new  machinery  for  pro- 
ducing food.  Then,  as  now,  production  diminished,  while  consumption  was 
maintained  —  the  deficiency  being  made  up  by  the  contraction  of  debts  to 
Europe,  for  an  immense  amount  of  cloths  and  silks,  the  power  to  pay  for 
which  had  no  existence.  Then,  as  recently,  there  was  great  apparent  pros- 
perity, as  preparation  for  the  universal  bankruptcy  of  1841-2.  The  prepa- 
ration now  being  made  is  similar  in  all  its  parts  ;  and  as  the  causes  are  the 
same,  we  may  be  assured  that  the  effects  will  not  be  different. 


PRESIDENT   OF   THE   UNITED   STATES.  37 

ever,  that  the  prices  of  1821-25  would  be  the  standard,  in  the 
event  of  the  creation  of  a  domestic  market,  that  would  relieve  the 
farmer  from  the  necessity  for  going  abroad,  we  obtain  the  result, 
that  the  same  crops  which  now  sell  for  $1,500,000,000  would  then 
command  $2,200,000,000  — making  a  difference  of  $700,000,000, 
which  may  be  regarded  as  the  actual  price  paid  by  the  agricul- 
tural body,  for  the  privilege  of  almost  giving  away  food,  to  the 
extent  of  $26,000,000. 

The  prices  above  given,  are  those  of  the  ports  of  shipment, 
always  greatly  higher  than  those  of  the  places  of  production. 
Were  we  now  to  add  the  saving  of  inland  transportation,  that 
would  be  consequent  upon  the  creation  of  local  markets,  the  dif- 
ference would  reach  $1,000,000,000 ;  and  this,  too,  when  taking 
as  the  standard  the  prices  of  1821-25,  embracing  years  of  almost 
universal  distress  throughout  America  and  Europe.  Were  we 
to  take  the  average  of  1816-25  —  $7.67  —  it  would  reach 
$1,500,000,000.  The  average  of  all  France  for  every  decade 
of  the  last  forty  years,  has  exceeded  18  francs  for  the  hectolitre  of 
wheat  —  being  the  equivalent  of  $1.25  per  bushel;  and  the  later 
periods  are  the  highest  of  all ;  whereas,  they  are  here  the  lowest. 
The  French  average  of  the  six  years  ending  in  1852,  for  all 
France,  must  have  been  50  per  cent,  greater  than  the  average  of 
those  years  for  the  whole  of  this  country ;  and  yet,  all  that  was 
required  for  bringing  prices  here  to  a  level  with  those  abroad,  was 
the  creation  of  a  market  for  food  to  the  extent  of  $26,000,000  — 
being  less  than  2  per  cent,  of  the  total  product.  To  those  who 
doubt  this,  it  can  be  necessary  only  to  say,  that  the  differences 
here  stated  as  likely  to  occur,  correspond  exactly  with  those 
that  did  occur  in  England,  in  the  period  between  1750  and  1770. 
Commerce  then  growing,  and  the  circulation  becoming  rapid,  the 
dependence  on  the  trader  diminished  —  every  stage  of  that  dimi- 
nution being  marked  by  an  increase  in  the  value  of  labor  and 
land.  Here,  on  the  contrary,  the  dependence  on  ,the  trader 
steadily  increases  ^ — every  stage  of  its  increase  being  marked  by 
a  decline  in  the  price  of  food,  by  which  the  price  of  land  and  labor 
must  ultimately  be  regulated. 

It  may,  however,  Mr.  President,  be  said,  that  the  food  con- 
sumers would  suffer  by  such  a  course  of  operation.  Directly  the 
reverse  of  this,  however,  has  been  the  case  in  all  other  countries ; 
and  so  would  it  be  with  us.  At  no  period  of  England's  history, 
have  the  evidences  of  growing  civilization,  as  furnished  by  the 
approximation  of  the  prices  of  raw  materials  and  finished  pro- 
ducts, been  so  great,  as  in  the  five-and-thirty  years  preceding  the 
opening  of  the  wars  of  the  French  Revolution  ;  and  at  none,  has 
the  condition  of  the  people  so  much  improved.  Circulation 
became  from  year  to  year  more  rapid.  Labor  was  from  year  to 
year  more  economized ;  and  as  the  power  of  accumulation  is 


38  LETTERS   TO   THE 

wholly  dependent  upon  such  economy,  it  followed,  necessarily, 
that  wealth  most  rapily  augmented.  Land  and  man,  in  that 
period,  almost  doubled  in  value  ;  and  all  because  of  the  relief 
from  the  tax  of  transportation,  resulting  from  the  growth  of  com- 
merce. So,  too,  in  France.  At  no  period  in  the  last  two  cen- 
turies, has  corn  been  so  low  in  price  as  in  the  days  of  Louis  XV. ; 
and  yet,  at  none,  have  the  people  so  much  suffered  from  the  want 
of  food.  Commerce  then  had  scarcely  an  existence.  Since  then, 
the  price  has  rapidly  increased  —  enabling  the  farmer  to  gain  on 
both  hands  :  first,  by  obtaining  more  money  for  his  corn ;  and, 
second,  by  obtaining  more  cloth  for  his  money.  Farm  wages 
rise  ;  and  with  that  rise,  there  is,  necessarily,  a  constant  augmen- 
tation of  wages  in  every  other  pursuit  —  it  being  only  by  tempt- 
ing the  people  of  the.  country,  to  come  to  the  towns,  that  factories 
can  obtain  supplies  of  labor.  Desiring,  then,  to  ameliorate  the 
condition  of  man,  we  must  begin  with  the  laborer  on  the  land  — 
his  wages  being  the  standard  by  which  all  others  are  to  be  com- 
pared ;  and  that  by  which  they  are  regulated.  The  more  close 
the  approximation  of  the  prices  of  raw  materials  and  finished 
commodities,  the  higher  will  be  the  wages,  and  the  greater  the 
tendency  towards  civilization. 

As  it  was  in  England,  and  as  it  is  now  in  France,  so  would  it 
be  among  ourselves.  The  work  of  making  a  market  for  the  food 
that  is  now  exported,  would  make  a  demand  for  muscular  and 
mental  force  —  enabling  each  and  every  man  to  sell  his  services, 
and  to  purchase  those  of  the  people  around  him.  Labor  being 
in  demand,  its  price  would  rise ;  and  the  more  rapid  the  rise,  the 
more  it  would  be  economized ;  the  greater  would  be  the  power 
of  accumulation ;  the  more  abundant  would  become  the  machinery 
required  for  enabling  him  to  call  the  forces  of  nature  to  his  aid  ; 
the  larger  would  be  the  proportion  of  the  mental  and  physical 
force  of  the  community  given  to  developing  the  treasures  of  the 
earth  ;  and  the  larger  would  be  the  reward  of  labor,  in  food  and 
clothing.  Commerce  would  then  grow  rapidly,  but  the  power 
of  the  foreign  trader  would,  then,  as  much  decline  —  precisely  as 
we  see  to  have  been  the  case  in  both  France  and  England,  at  the 
periods  above  referred  to. 

The  proposition,  that  civilization  grows  in  the  direct  ratio  of 
the  removal  of  obstacles  standing  between  the  producer  and  the 
consumer,  and  the  consequent  approximation  of  the  prices  of  the 
products  of  the  earth  in  their  rude  and  finished  forms,  is  a  great 
and  universal  law,  to  which  no  exception  can  be  found.  Being 
so,  it  follows,  necessarily,  that  raw  materials  should  rise  in  price 
as  finished  commodities  are  cheapened;  that  civilization  should 
advance  with  the  advance  in  the  price  of  those  materials ;  and 
that  that  civilization  should  exhibit  itself  in  the  form  of  increased 
power  of  combination,  increased  development  of  individuality,  in- 


PRESIDENT   OF   THE   UNITED   STATES.  39 

creased  sense  of  responsibility,  and  increased  power  of  progress. 
Thus  far,  the  policy  of  the  Union,  as  we  have  seen,  has  tended 
in  an  opposite  direction — towards  lessening  steadily  the  price  of 
food ;  and  as  such  progress  tends  inevitably  towards  barbarism, 
it  is  here  we  find  the  fundamental  cause  of  the  extraordinary 
demoralization,  now  so  rapidly  in  progress.  —  In  another  letter, 
Mr.  President,  I  propose  to  show,  that  the  facts  in  regard  to 
the  great  staple  of  the  South  are  precisely  the  same  as  those 
above  described. 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  January  ±th,  1858. 


40  LETTERS   TO   THE 


LETTER  EIGHTH. 

TURNING  now  southward,  Mr.  President,  we  may  look  to  our 
other  great  staple,  COTTON,  with  a  view  to  see  if  the  course  of 
operation  has  been  the  same.  That  it  has  been  so,  you  may 
readily  be  satisfied. 

The  crop  of  1814  was  estimated  at  70,000,000  of  pounds,  of 
which  more  than  8,000,000  were  converted  into  cloth  in  the  coun- 
try within  thirty  miles  of  Providence  —  the  total  domestic  con- 
sumption having  amounted  to  90,000  bales,  or  nearly  30,000,000 
of  pounds.  In  the  seven  years  following,  the  crop  rose  succes- 
sively to  106,000,000,  124,000,000,  130,000,000,  125,000,000, 
167,000,000,  and  160,000,000;  but  the  home  manufacture  as 
steadily  declined — producing  a  constantly  increasing  necessity  for 
pressing  upon  the  foreign  market,  with  results  such  as  are  here 
exhibited : 

Export  1815  and  1816 average  80,000,000 total  price  $20,500.000 

"      1821  and  1822 «       134,000,000 "        »      21,500,000 

"      1827   to   1829 "      256,000,000 "        "      26,000,000 

The  quantity,  as  we  see,  had  more  than  trebled,  while  the 
receipt  therefor,  had  increased  but  little  more  than  25  per  cent. 
The  prices  here  given,  being  those  of  the  shipping  ports,  and  the 
quantity  to  be  transported  having  so  much  increased,  and  having 
required  so  great  an  extension  of  cultivation,  it  is,  I  think,  rea- 
sonable to  assume,  that  the  planter  in  those  years  gave  256,000,000 
of  pounds  —  receiving,  in  exchange,  no  larger  amount  of  money 
than,  six  years  previously,  he  had  received  for  less  than  a  third 
of  that  quantity. 

1830  to  1832  average,  pounds,  280,000,000  $28,000,000 

1840  to  1842  "  «        619,000,000 55,000,000 

1843  to  1845  "  ««        719,000,000  51,000,000 

We  have,  here,  an  addition  to  the  quantity  of  1815-16,  amount- 
ing to  no  less  than  630,000,000  of  pounds,  and  requiring  nine 
times  the  amount  of  inland  transportation  —  even  admitting  that 
the  area  of  cultivation  had  remained  the  same.  We  know,  how- 
ever, that,  in  that  period,  it  had  quadrupled,  and  must  have  re- 
quired fifteen,  if  not  even  twenty  times  as  large  a  force  of  men, 
horses,  and  wagons,  to  do  the  work.  Allowing  for  this,  Mr. 
President,  you  will  readily  see  that  the  planter  must,  in  these 
years,  have  been  giving  700,000,000  of  pounds,  for  less  than 
twice  the  quantity  of  money  that,  thirty  years  before,  he  had 
received  for  80,000,000. 

1849 pounds,  1,026,000,000 $66,000,000. 

Here  we  have  nearly  940,000,000  to  be  transported,  additional 


PRESIDENT   OF   THE   UNITED   STATES.  4l 

to  those  of  1815-16  ;  and  from  an  area  of  cultivation  that,  because 
of  the  unceasing  exhaustion  of  the  soil,  had  been  again  enormously 
extended.*  Such  being  the  case,  it  may  well  be  doubted,  if  the 
actual  quantity  of  money,  or  money's  worth,  that  reached  the 
planter,  in  exchange  for  these  1,034,000,000,  was  much  more  than 
twice  as  great  as  that  his  predecessors  had  received  for  80,000,000. 
Making  the  smallest  allowance  for  additional  transportation,  he 
was  here  giving  three  pounds,  for  the  same  money  that  before 
had  been  received  for  one. 

1850-1851  average,  pounds,  781,000,000  $92,000,000 

The  great  fact  is  here  presented,  that  the  less  cotton  the 
planter  sends  to  the  foreign  market,  the  more  money  he  re- 
ceives. In  this  case,  there  is  a  saving  of  internal  transportation, 
as  compared  with  1849,  upon  245,000,000  pounds,  and  an  in- 
crease of  gross  receipt,  amounting  to  $26,000,000.  Allowing 
for  the  additional  freight,  as  compared  with  1821,  the  producer 
was  now  not  giving  more  than  two  pounds,  for  the  price  received 
before  for  one. 

1852  pounds,  1,093,000,000  $88,000,000. 


*  The  following  paragraph  is  from  a  speech  of  a  distinguished  citizen  of 
Alabama,  and  exhibits  the  action  of  the  system  in  a  State  that  but  forty 
years  since  had  no  existence :  — 

"I  can  show  you,  with  sorrow,  in  the  older  portions  of  Alabama,  and  in 
my  native  county  of  Madison,  the  sad  memorials  of  the  artless  and  exhaust- 
ing culture  of  cotton.  Our  small  planters,  after  taking  the  cream  off  their 
lands,  unable  tp  restore  them  by  rest,  manures,  or  otherwise,  are  going  fur- 
ther West  and  South  in  search  of  other  virgin  lands,  which  they  may  and 
will  despoil  and  impoverish  in  like  jnanner.  Our  wealthier  planters,  with 
greater  means,  and  no  more  skill,  are  buying  out  their  poorer  neighbors,  ex- 
tending their  plantations,  and  adding  to  their  slave  force.  The  wealthy  few, 
who  are  able  to  live  on  smaller  profits,  and  to  give  their  blasted  fields  some 
rest,  are  thus  pushing  off  the  many  who  are  merely  independent.  Of  the 
twenty  millions  of  dollars  annually  realized  from  the  sales  of  the  cotton  crop 
of  Alabama,  nearly  all,  not  expended  in  supporting  the  producers,  is  re-in- 
vested in  land  and  negroes.  Thus,  the  white  population  has  decreased,  and 
the  slave  increased  almost  pari  passu,  in  several  counties  of  our  State.  In 
1825,  Madison  County  cast  about  3000  votes ;  now,  she  cannot  cast  exceed- 
ing 2300.  In  traversing  that  county,  one  will  discover  numerous  farm- 
houses, once  the  abode  of  industrious  and  intelligent  freemen,  now  occupied 
by  slaves  —  or  tenantless,  deserted,  and  dilapidated ;  he  will  observe  fields, 
once  fertile,  now  unfenced,  abandoned,  and  covered  with  those  evil  harbin- 
gers, foxtail  and  broomsedge ;  he  will  see  the  moss  growing  on  the  moulder- 
ing walls  of  once  thrifty  villages,  and  will  find  '  one  only  master  grasps  the 
whole  domain"  that  once  furnished  happy  homes  for  a  dozen  white  families. 
Indeed,  a  country  in  its  infancy,  where,  fifty  years  ago,  scarce  a  forest  tree 
had  been  felled  by  the  axe  of  the  pioneer,  is  already  exhibiting  the  painful 
signs  of  senility  and  decay  apparent  in  Virginia  and  the  Carolinas." — C.  C. 
Clay. 


42  LETTERS   TO   THE 

Here  is  an  increase,  in  the  quantity  requiring  to  be  transported, 
amounting  to  more  than  300,000,000  pounds,  accompanied  by  a 
diminution  of  gross  receipt,  amounting  to  $4,000,000;  and  a 
diminution  of  net  receipt,  that  cannot  be  estimated  at  less  than 
$10,000,000.  As  compared  with  1815-16,  the  planter  must,  here, 
have  been  giving  five  pounds,  for  the  price  he  before  had  received 
for  one. 

The  course  of  things,  above  described,  is  without  a  parallel  in 
the  history  of  the  world.  In  the  natural  order  of  affairs,  the  cul- 
tivator profits  by  improvements  in  the  machinery  of  conversion, 
his  products  rising  in  their  prices,  as  the  finished  commodities  fall 
—  rags  becoming  dearer,  as  paper  becomes  cheaper  —  and  wool 
going  up,  as  cloth  goes  down.  Here,  however,  all  is  different.  In 
the  forty  years  above  referred  to,  each  and  every  one  has  brought 
with  it  some  improvement  in  the  modes  of  converting  cotton  into 
cloth,  until  at  length  the  labor  of  a  single  person  is  more  pro- 
ductive than  that  of  four  or  five  had  been  before  ;  and  yet,  so  far 
are  those  improvements  from  having  been  attended  with  any  in- 
crease of  price,  that  we  find  the  planters  giving  steadily  more  and 
more  cotton  for  less  money  —  and  thus  affording  the  most  conclu- 
sive proof  of  a  tendency  towards  barbarism. 

The  cause  of  all  this  being,  as  we  are  told,  that  too  much  cot- 
ton is  produced,  the  planters  hold  meetings  with  a  view  to  reduc- 
tion in  the  quantity ;  and  yet,  from  year  to  year,  the  crop  grows 
larger;  the  area,  over  which  it  requires  to  be  grown,  becomes 
more  and  more  extended ;  and  the  net  proceeds  decline  in  the 
proportion  they  bear  to  the  population  of  the  States  in  which  it 
is  produced.  In  1815,  that  population  amounted  to  2,250,000, 
whereas,  in  1850,  it  exceeded  6,000,000.  In  the  first,  the  gross 
proceeds  of  80,000,000  pounds  were  $20,500,000;  whereas,  in 
1849,  1,026,000,000,  with  all  the  vast  increase  of  freight,  were 
given  for  $66,000,000  ;  and  the  total  gross  proceeds  of  the  crop 
could  but  little  have  exceeded  $80,000,000.  Struggle  as  the 
planters  may,  the  case  is  still  the  same  —  they  being  required  to 
give,  from  year  to  year,  more  cotton  for  less  money ;  and  that,  too 
in  defiance  of  a  great  natural  law,  in  virtue  of  which,  they  should 
have  more  money  for  less  cotton. 

We  are  thus,  Mr.  President,  presented  with  the  remarkable 
fact,  that  the  two  chief  products  of  the  Union  are  steadily  decli- 
ning in  their  power  to  command  money  in  exchange ;  and  that, 
so  far  are  the  farmer  and  planter  from  dividing  with  the  consumer 
of  their  products,  the  advantages  resulting  from  improved  machi- 
nery of  transportation  and  conversion,  that  the  latter  gets  it  all, 
and  more  —  the  former  obtaining  less  money,  the  more  produce 
he  has  to  sell.  » 

It  is  asserted,  however,  that  all  this  is  in  strict  accordance  with 
some  great  law,  in  virtue  of  which  every  thing  tends  to  become 
cheaper;  but  a  brief  examination  of  the  general  movement  of 


PRESIDENT   OF  THE   UNITED    STATES.  43 

prices  will  probably  satisfy  you  that  the  only  law  with  which  it  is 
in  accordance,  is  that  human  one,  denounced  by  Adam  Smith  — 
having  for  its  object  the  cheapening  of  the  raw  products  of  the 
earth,  the  establishment  of  the  supremacy  of  trade,  and  the  reduc- 
tion of  man  to  the  condition  of  a  mere  instrument  to  be  used  by 
the  trader ;  or,  in  other  words,  to  that  of  a  slave. 

In  England,  the  price  of  sheep's  wool  has  doubled  in  the  last 
eighty  years ;  and  that,  too,  notwithstanding  the  extraordinary 
extent  to  which  cotton,  in  that  period,  has  been  substituted  for 
wool.  Had  there  been  any  commodity  whatsoever,  by  which  the 
theory  of  reduction  of  prices  could  have  been  supported,  this 
would  certainly  have  been  the  one ;  and  yet,  the  facts  are  directly 
opposed  thereto.  In  France,  too,  wool  has  greatly  risen.  In 
Germany,  it  is  now  so  much  higher  than  it  was  thirty  years  since, 
that  that  country  has  become  a  great  importer,  where,  formerly,  it 
was  a  large  exporter  of  this  commodity.  —  Looking  next  tp  silk, 
we  find  the  following  remarkable  illustration  of  the  great  law 
that  lies  at  the  foundation  of  all  human  progress.  In  the  Re- 
port on  the  Commerce  and  Navigation  of  France,  we  have  the 
official  value,  established  about  thirty  years  since,  of  all  the  com- 
modities exported  and  imported,  side  by  side  with  their  actual 
value,  and  are  thus  enabled  to  study  the  changes  that  are  now 
going  on,  and  measure  their  extent.  How  great  they  are, 
and  how  precisely  they  move  in  the  direction  that  has  been 
indicated,  is  shown  in  the  fact,  that  while  sewing -silks  have 
fallen  from  95  to  53  francs  per  pound,  cocoons  have  risen  from 
3  to  14  francs. 

Turning  now  to  Mr.  Tooke's  valuable  table  of  prices,  in  the 
period  from  1782  to  1838,  and  taking  the  first  and  last  decades 
thereof,  we  obtain  the  following  results  :  — 

1782  to  1701.  1829  to  1838. 

Bristles percwt.  £Q  Us.  OOrf. £15  12».  0<W. 

Flax per  9  head  1  7  00  2      3  10 

Oil per  ton  40  00  00  „  48  00  00 

Butter percwt.  2  10  10  3  16  00 

Irish  mess-beef  ...per  tierce  3  10  10  4  18  00 

Tallow percwt.  2  1  00  1  19  6 

Timber,  fir per  load  2  4  00  2      8  00 

Whalebone per  ton  150  00  90  215  00  00 

In  all  these  cases,  the  producer  was  profiting  by  the  increased 
facilities  of  transportation  and  conversion — obtaining  larger  prices 
lor  all  he  had  to  sell,  with  constant  increase  in  his  power  to  im- 
prove his  own  machinery,  and  thus  augment  the  quantity  pro- 
duced; whereas,  in  those  of  flour  and  cotton,  he  is  seen  to  have 
been  receiving  smaller  prices,  with  constant  diminution  of  quan- 
tity, resulting,  as  will  be  shown,  from  the  constant  exportation 
of  the  elements  of  which  flour  and  cotton  are  composed. 


44  LETTERS    TO    THE 

We  are  told,  however,  that  in  the  case  of  cotton,  decline  of 
price  is  the  necessary  consequence  of  a  growth  in  the  supply 
exceeding  the  wants  of  the  world ;  and  therefore  it  is,  that  the 
planters  hold  meetings,  for  the  purpose  of  devising  measures  tend- 
ing to  the  limitation  of  the  quantity  to  be  grown.  In  so  doing, 
however,  they  are  only  repeating  the  operation  performed  at  an 
earlier  period  in  Virginia,  in  reference  to  tobacco  ;  and  thus  it  is, 
that  like  causes  produce  like  effects.  The  real  difficulty,  Mr.  Pre- 
sident, is  now,  as  it  then  was,  to  be  found  in  the  total  absence  of 
diversification  of  employments  —  producing  a  necessity  for  un- 
ceasing waste  of  labor,  and  unceasing  exhaustion  of  the  soil, 
accompanied  by  a  destruction  of  the  value  of  the  land,  and  of  the 
man  by  whom  it  is  cultivated.  That  such  is  certainly  the  case, 
Mr.  President,  I  propose  to  furnish  further  evidence,  in  another 
letter,  remaining  meanwhile, 

Yery  respectfully, 

Yours, 

HENRY  C.  CAREY. 
Philadelphia,  January  6th,  1858. 


PRESIDENT   OF   THE   UNITED   STATES.  45 


LETTER    NINTH. 

THE  reduction  in  the  price  of  flour,  and  of  cotton,  is  not,  as 
you,  Mr.  President,  have  seen,  in  accordance  with  any  general 
law.  On  the  contrary,  it  is  in  direct  opposition  to  a  great  law 
whose  existence  is  everywhere  manifest.  Neither  is  the  reduction 
in  the  price  of  cotton  a  consequence  of  any  excess  in  the  quantity 
produced,  as  you  will  be  satisfied  when  you  reflect,  that  the  total 
quantity  produced  in  the  world  does  not  equal  two  pounds  per 
head ;  whereas,  the  quantity  that  should  be  used,  cannot  be 
limited  to  ten,  or  even  twenty,  pounds  per  head.  Such  being  the 
case,  the  difficulty,  it  is  clear,  does  not  lie  in  the  excess  of  pro- 
duction, but  in  the  deficiency  of  consumption.  Could  thexcause 
of  this  deficiency  be  discovered,  and  a  remedy  be  applied,  the 
planter  might  go  on  increasing  his  quantity  from  year  to  year  — 
the  price  of  his  cotton  steadily  rising,  and  that  of  cloth  as  steadily 
falling,  precisely  as  we  see  to  be  the  case  with  rags  and  paper, 
cocoons  and  silks,  sheep's  wool  and  cloth,  flax  and  linen. 

The  larger  the  price  of  corn,  the  greater  must  be  the  power  of 
the  farmer  to  purchase  cloth,  and  the  greater  the  quantity  of 
money  obtainable  by  the  planter  in  return  for  any  given  quantity 
of  cotton.  The  tendency  of  American  policy,  however,  is  towards 
reducing  the  price  of  corn  throughout  the  world ;  and,  as  a  neces- 
sary consequence,  towards  destroying  the  power  of  the  people  of 
France  and  Germany,  Russia  and  Austria,  England  and  Ireland, 
to  purchase  cloth.  That  such  is  the  case,  will  be  obvious  to  you, 
Mr.  President,  when  you  shall  have  reflected,  for  a  moment,  upon 
the  effect  that  is  now  so  obviously  produced,  by  an  increase  in 
our  export ;  and  upon  that  which  would  be  produced,  were  it 
possible  at  once  to  say,  that  no  more  food  would  go  from  America 
to  any  country  of  the  world  —  we  having  followed  the  advice  of 
Adam  Smith,  when  he  advised  that  tons  of  food  should  be  com- 
bined with  wool,  so  as  to  enable  both  to  travel  cheaply  to  distant 
lands.  Such  a  measure  would,  at  once,  relieve  the  European 
market  from  the  pressure  by  which  it  is  now  kept  down,  and  the 
price  of  English  and  Irish  food  would  rapidly  advance  —  afford- 
ing inducement  to  the  extension  of  cultivation,  and  making  demand 
for  labor,  with  large  increase  of  wages,  and  consequent  increase  in 
the  power  to  purchase  cloth.  German  food  and  German  land 
would  rise,  and  so  would  those  of  France  and  Russia,  Austria 
and  Spain.  Agriculture  thus  receiving  a  new  impetus,  agricul- 
tural labor  would  rise  in  price  —  rendering  indispensable  an  in- 
crease in  the  wages  of  factory  labor.  What  is  needed  throughout 
the  world  is,  rapidity  of  circulation,  making  demand  for  labor 
and  its  products.  Centralization  is  opposed  to  this  —  producing 


46  LETTERS   TO   THE 

stagnation  everywhere,  and  compelling  the  planters  of  the  world 
to  give  n  constantly  increasing  quantity  of  their  commodities  — 
Miir'ur  and  cotton  —  for  a  constantly  diminishing  quantity  of 
money.  Nearly  all  the  countries  of  Europe  having  followed  in 
the  lead  of  France,  in  the  effort  to  produce  decentralization,  the 
effect  is  seen,  in  the  rise  that  has  there  taken  place,  in  the  prices 
of  food  and  wool. 

Such  would  be  the  effect,  among  ourselves,  of  the  adoption  of 
the  policy  that,  there,  has  been  productive  of  such  results.  The 
measures  required  for  making  a  domestic  market  for  food — thus 
relieving  the  farmers  of  Europe  from  American  competition  — 
would  produce  rapid  circulation  of  labor  and  commodities,  and  the 
American  farmer  would  soon  obtain  as  much  for  his  corn,  as  is  paid 
in  France  or  England.  The  rise  in  the  price  of  agricultural  labor 
would  be  followed  by  rise  in  that  which  was  otherwise  employed. 
Labor  becoming  from  day  to  day  more  productive,  at  the  close  of  a 
few  brief  years,  the  domestic  consumption  of  cotton  would  be  thrice 
as  great  as  now,  with  corresponding  diminution  in  the  quantity 
pressing  on  the  market  of  Europe — enabling  the  planter  to  obtain 
for  large  crops  a  higher  price,  per  pound,  than  he  now  receives 
for  small  ones. 

Adam  Smith  denounced  the  British  system  of  his  time,  because 
of  its  being  based  upon  the  idea  of  cheapening  all  the  raw  mate- 
rials of  manufacture  —  labor  and  the  products  of  the  land.  The 
system  of  the  present  day  looks  to  the  production  of  the  same 
results ;  and  therefore  is  it,  that,  in  accordance  with  the  ideas  of 
Dr.  Smith,  it  has  been  resisted  by  all  the  civilized  nations  of  the 
world  —  America  alone  excepted.  In  all  of  them,  consequently, 
raw  produce  is  rising  in  price,  while  here,  alone,  is  found  a  civi- 
lized community,  in  which  the  produce  of  the  land  has  steadily, 
during  half  a  century,  declined  in  price  —  the  farming  and  plant- 
ing interests  having  been  most  consistent,  in  the  pursuit  of  a  policy 
tending  to  diminish  the  quantity  of  money  to  be  received,  in  ex- 
change for  a  bale  of  cotton,  or  a  barrel  of  flour. 

The  evidences  of  growing  civilization,  Mr.  President,  are  to  be 
sought  in  two  directions  :  first,  in  the  rise  in  the  prices  of  the  raw 
products  of  the  earth ;  and,  second,  in  the  decline  in  those  of  the 
manufactured  commodities  required  for  human  purposes.  So  far 
as  regards  the  first,  that  evidence  has  not  been  here  obtained  — 
both  flour  and  cotton  having  steadily  fallen  in  price,  to  the  great 
disadvantage  of  those  by  whom  they  are  produced.  The  manu- 
factured commodity  that,  more  than  any  other,  is  required  by  the 
farmer  and  the  planter,  is  IRON,  and  we  may  now  turn  to  it,  with 
a  view  to  ascertain  if  we  can  find  in  that  direction,  the  evidence  of 
growing  civilization  with  which,  thus  far,  we  have  failed  to  meet. 
Doing  so,  we  ascertain  that,  in  1821  and  1822,  the  average  price 
of  bars  at  Glasgow,  was  £10  14s.,  or  $51.36,  a  ton,  at  which  rate 
the  100,000,000  of  pounds  of  cotton  then  shipped  would  have 


PRESIDENT   OF   THE   UNITED   STATES.  47 

paid  for,  at  that  port,  about  450,000  tons  — leaving  $3,500,000 
to  defray  the  inland  expenses  of  sending  the  cotton  to  the  port  of 
shipment.  Turning  now  to  the  four  years  ending  in  1855,  we  find 
that  the  average  price  of  bars  has  been  $38.50  per  ton,  and- that 
the  quantity  of  cotton  that  has  been  shipped,  has  averaged 
1,050,000,000  pounds,  producing  at  the  port  of  shipment  an  ave- 
rage of  $94,500,000  —  deducting  from  which,  the  inland  expenses, 
the  planters  might  have  received,  probably,  $80,000,000,  with  which 
they  could  have  purchased  about  2,100,000  tons  —  thus  giving  ten 
pounds  for  a  smaller  quantity  of  iron,  than,  before,  they  could  have 
had  for  five. 

The  price  of  flour,  prior  to  the  opening  of  the  Crimean  war,  was 
lower,  as,  Mr.  President,  you  have  seen,  than  it  had  been  for  half  a 
century ;  and  less,  by  nearly  one-half,  than  it  had  been  in  the  period 
from  1815  to  1825.  In  that  period,  the  price  of  bar  iron  in  Liver- 
pool averaged  about  £10  ;  or  but  little  more  than  that  of  the  past 
four  years  —  the  fluctuations  in  these  latter  having  been  between 
£7  10s.  and  £9  12s.  Qd.  The  raw  materials  of  labor — food  and 
cotton  —  not  only  do  not  approximate  towards  iron,  but  become 
more  widely  separated  from  year  to  year. 

Still  more  strongly  is  this  the  case,  when  we  compare  the  prices 
of  food  and  cotton,  with  those  of  other  metals.  The  raw  mate- 
rials, iron  and  lead,  have  fallen  in  actual  price,  but  copper  and  tin 
have  both  advanced,  as  will  be  seen  by  the  following  figures,  de- 
rived from  the  work  of  Mr.  Tooke,  before  referred  to  :  — 

1782  to  1791.  1829  to  1838. 

Copper per  cwt.  £4   la.  2d £4   8s.  Id. 

Tin per  cwt.     413    4  4  10 

Lead per  19£  cwt.  19   3    0    18   300 

Turning  next  to  the  year  1852,  at  which  time  flour  had  fallen 
to  little  more  than  a  third  of  the  price  at  which  it  sold  in  the 
period  from  1810  to  1815,  we  find  that  the  average  prices  had  still 
further  advanced  —  copper  having  been  £4  18s.  —  tin,  £4  fs. — 
and  lead,  £11. 

The  whole  value  of  these  metals,  is  in  the  labor  given  to  their 
extraction.  That  labor  is  the  product  of  food  and  clothing  — 
of  corn  and  wool.  The  foreign  raw  materials,  of  which  British 
labor  is  composed,  are  perpetually  falling  in  price,  while  highly 
important  commodities,  received  by  the  foreign  producers  in  ex- 
change, as  regularly  rise ;  and  that  being  the  direct  road  to- 
wards centralization,  barbarism,  and  slavery,  we  may  now  readily 
understand  the  causes  of  the  existence  of  the  extraordinary  demo- 
ralization now  in  progress  among  ourselves.  The  road  to  free- 
dom and  civilization,  lies  in  a  direction  precisely  the  opposite 
of  that  which,  thus  far,  has  been  pursued.  That  road  is,  under 
the  lead  of  France,  being  travelled  by  all  the  advancing  nations 
of  Europe,  and  hence  the  improvement  that  becomes  from  day  to 


48  LETTERS   TO   THE 

day  more  manifest  in  the  growing  harmony  of  all  the  various 
interests  of  which  society  is  composed.  The  contrary  road  is, 
under  the  guidance  of  England,  travelled  by  Ireland  and  India, 
Portugal  and  Turkey,  as  well  as  these  United  States ;  and  hence 
it  is,  that  in  all  of  them  we  see  an  increasing  centralization  and  a 
constantly  growing  discord.  Hence,  too,  it  is,  that  in  the  land 
whence  issued  the  Declaration  that  all  men  were  born  equal,  it  is 
now  openly  declared  that  "free  society  has  proved  an  utter  failure," 
and  that  bondage  is  the  natural  condition  of  the  man  who  labors, 
be  he  white  or  black. 

The  history  of  the  Union,  Mr.  President,  is  an  enigma  —  our 
words  having  been  those  of  civilization  and  freedom,  while  our 
tendencies,  with  only  occasional  intervals,  have  been  in  the  di- 
rection of  slavery  and  barbarism.  That  such  has  been  the  case, 
was  obvious  to  yourself,  when  you  told  your  fellow-citizens,  in 
your  recent  message,  that,  "for  more  than  forty  years,  the  history 
of  the  country  has  been  one  of  extravagant  expansions  in  the 
business  of  the  country,  followed  by  ruinous  contractions.  At 
successive  intervals,"  as  you  continued,  "the  best  and  most  enter- 
prising men  have  been  tempted  to  their  ruin  by  excessive  bank 
loans  of  mere  paper  credit,  exciting  them  to  extravagant  importa- 
tions of  foreign  goods,  wild  speculations,  and  ruinous  and  demo- 
ralizing stock-gambling." 

That  such,  Mr.  President,  have  been  the  facts,  cannot  well  be 
questioned.  "At  successive  intervals,"  we  have  abandoned  the 
policy  whose  admirable  effects  in  reducing  the  cost  of  transporta- 
tion, and  thus  diminishing  the  taxation  of  the  farmer  and  the 
planter,  were  so  well  illustrated  by  Adam  Smith,  when  he  showed 
how  cheaply  the  cotton  and  the  wool  could  be  carried  to  the  re- 
motest parts  of  the  earth,  after  having  been  combined  in  the  form 
of  a  piece  of  cloth;  and,  in  each  and  every  one  of  those  periods, 
we  have  seen  precisely  the  phenomena  you  so  well  describe. 
Numerous  banks  having,  then,  been  created,  we  have  had  "extra- 
vagant expansions,"  followed  by  "ruinous  contractions."  Enor- 
mous importations  of  foreign  goods  have  been  followed  by  the 
wildest  speculations,  and  by  the  most  "ruinous  and  demoralizing" 
gambling  in  stocks  and  public  lands.  At  other  intervals,  ajl  this 
has  disappeared — the  societary  movement  having  become  so  quiet 
and  tranquil,  that  successive  years  have  passed  without  the 
slightest  speculation.  Inquiring,  now,  what  have  been  those 
years,  we  find  them  to  have  been  those  in  which  the  policy  of  the 
country — being  in  accordance  with  the  ideas  of  Adam  Smith  — 
tended  towards  relieving  the  planter  and  the  farmer  from  the 
tax  of  transportation. 

Such,  Mr.  President,  having  been  the  uniform  results  of  change 
in  the  policy  of  the  central  government,  the  solution  of  the  enigma 
may,  as  it-  appears  to  me,  be  found  by  any  one  who  will  carefully 
study  the  following  simple  proposition  :  Barbarism  grows  in  the 


PRESIDENT   OF   THE   UNITED   STATES.  49 

ratio  of  the  export  of  the  rude  products  of  the  land,  and  conse- 
quent exhaustion  of  the  soil.  Civilization  grows  in  the  ratio  of 
the  ability  to  diminish  the  bulk  of  the  products  of  the  plantation 
and  of  the  farm,  and  to  restore  to  the  soil  the  refuse  of  its  pro- 
ducts—  thus  augmenting  the  productive  power  of  the  land,  and 
enabling  more  and  more  people  to  live  together.  —  In  which  of 
these  directions  we  are  to  move,  is  dependent,  Mr.  President,  upon 
the  central  government,  and  not  upon  the  local  ones,  as  you  have 
seemed  to  think.  Such  being  the  case,  it  must  be  to  modification 
in  the  action  of  the  former,  we  must  look  for  a  diminution  of  these 
barbaric  tendencies,  to  whose  existence  you  have  so  properly 
called  the  attention  of  your  constituents.  That  modification 
once  obtained,  each  successive  day  will  tend  to  add  to  our  admi- 
ration of  the  men  who,  when  employed  in  making  the  Constitution, 
so  wisely  left  to  the  States  the  regulation  of  their  local  institu- 
tions, whether  engaged  in  converting  wool  and  food  into  cloth, 
or  in  aiding  the  exchanges  of  those  who  desired  to  borrow  money, 
with  those  who  had  money  to  lend. 

Trusting  that  you  will  become  convinced  of  this,  I  remain, 
Mr.  President, 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  January  Sth,  1858. 


50  LETTERS   TO   THE 


LETTER    TENTH. 

CIVILIZATION,  Mr.  President  —  growing  with  the  growth  of 
wealth  —  is  indicated  by  improvement  in  the  condition  of  man. 
Our  condition,  natural,  moral,  and  political,  having  much  dete- 
riorated within  the  last  few  years,  it  is  needed  that  we  seek  the 
causes  of  the  change,  which  must  be  found  in  diminution  of  our 
wealth. 

Wealth,  Mr.  President,  consists  in  the  power  to  control  and 
direct  the  forces  of  nature — resulting,  first,  from  the  possession  of 
the  necessary  machinery,  and  next,  from  the  possession  of  the 
knowledge  how  to  guide  it.  The  coal  that  is  mined  by  a  single 
man,  is  capable  of  doing  as  much  work,  as  could  be  done  by 
thousands  of  human  arms.  The  power  of  steam  employed  in 
Great  Britain,  is  estimated  as  being  equal  to  the  united  forces 
of  600,000,000  of  men;  and  yet,  the  total  number  of  persons 
employed  in  the  coal-mines  of  that  country,  is  but  120,000, 
two-thirds  of  whom  must  be  engaged  in  furnishing  fuel  for  the 
smelting'  of  ore,  for  the  rolling  of  iron,  and  for  household  and 
other  purposes.  The  entire  population  of  the  island,  in  1851,  was 
under  21,000,000,  each  one  of  whom,  were  the  power  thus  acquired 
equally  divided,  would  have  the  equivalent  of  nearly  thirty  willing 
slaves  employed  in  doing  his  work  —  slaves,  too,  requiring  neither 
food,  clothing,  nor  lodging,  in  return  for  the  service  thus  performed. 
Admitting  that  even  so  large  a  number  as  60,000,  were  employed 
in  the  extraction  of  the  fuel  by  which  this  power  is  supplied,  it 
would  give  but  1  in  350  of  the  population,  and  less  than  1  in  200 
of  those  who  are  capable  of  doing  a  full  day's  work.  Such  being 
the  case,  we  obtain  the  remarkable  result  that,  by  means  of  com- 
bination of  action,  less  than  one-half  of  one  per  cent,  of  the  adult 
population,  is  enabled  to  furnish  fifty  times  more  power  than 
could  be  supplied  by  the  whole  number,  were  each  man  laboring 
by  himself. 

To  enable  this  fuel  to  do  the  work,  it  is,  however,  required,  that 
man  should  play  the  part  of  engineer — substituting  mental  power 
for  the  physical  force,  that  would  otherwise  be  required.  The  engi- 
neer must  have  his  engine,  and  for  the  production  of  engines  there  is 
needed  a  portion  of  the  labor  that,  by  their  use,  is  to  be  economized. 
How  small,  however,  is  the  proportion  thus  required,  is  seen  from 
the  fact,  that  the  whole  number  of  steam-boiler  makers  in  Great 
Britain,  in  1841,  was  but  3479  ;  and,  as  the  total  number  of  per- 
sons engaged  in  making  steam-engines  cannot  be  ten  times  greater, 
we  thus  obtain  less  than  35,000  as  being  so  employed.  Adding 
now  together  the  miners  and  engine-makers,  we  obtain  less  than 
100,000  as  the  total  human  force  given  to  the  development  of  a 


PRESIDENT   OF   THE   UNITED   STATES.  51 

natural  one  equal  to  600,000,000  —  the  physical  force  of  each 
being,  thus,  by  means  of  association  and  combination,  multiplied 
no  less  than  six  thousand  times. 

Of  all  the  communities  of  the  world,  there  is  none,  Mr.  President, 
at  whose  command  has  been  placed  an  amount  of  power,  at  all  to 
be  compared  with  that  of  our  Union — the  quantity  of  fuel  within 
their  reach  being,  practically,  as  unlimited  as  is  the  air  we  breathe. 
It  underlies  a  large  portion  of  Pennsylvania,  Maryland,  Virginia, 
and  North  Carolina,  while,  throughout  the  regions  of  the  West, 
it  so  much  abounds  as,  in  a  great  majority  of  cases,  to  be  wholly 
valueless.  So,  too,  with  the  material  of  which  steam-engines  are 
composed  —  iron  ore  —  the  supplies  of  which  are  boundless  in 
extent,  and  waiting  only  for  the  moment  when  we  shall  deter- 
mine to  appropriate  them  to  our  use,  and  thus  acquire  wealth. 
To  what  extent  it  might  be  so  acquired,  is  shown  by  the  fact,  that 
a  single  hundred  thousand  men,  in  Britain,  furnish  power,  equal 
to  more  than  sixty  times  the  mere  muscular  force  of  the  whole 
adult  male  population  of  the  Union.* 

To  produce,  among  ourselves,  the  same  effect,  it  is  required, 
only,  that  we  adopt  the  same  measures  that  have  there  resulted 
in  such  a  wonderful  increase  of  force ;  and  thus  do  we  arrive  at 
the  great  fact,  that  by  means  of  the  proper  direction  of  the  labors 
of  the  one-hundredth  part  of  the  adult  population  of  the  Union, 
the  power,  or  wealth,  of  the  whole,  might,  in  a  brief  period,  be 
twenty  times  increased  —  each  and  every  person,  were  the  whole 
equally  divided,  being  thus  supplied  with  twenty  slaves  employed 
in  furnishing  fuel  and  food,  clothing  and  lodging,  while  consuming 
no  part,  whatsoever,  of  the  products  of  their  labor. 

The  treasures  of  nature  are  boundless  in  extent,  the  earth  being 
a  great  reservoir  of  wealth  and  power  —  requiring  for  their  full 
development  only  the  carrying  into  full  effect  the  idea  expressed 
by  the  magic  word,  ASSOCIATION.  That  such  is  the  fact,  is  seen 
in  every  case  in  which,  because  of  local  circumstances,  our 
people  find  themselves  enabled  to  combine  their  efforts  for  the 

*  The  question  may,  with  great  propriety,  be  asked  —  "If  power  really  is 
wealth,  why  is  it  that  the  people  of  England,  with  such  a  wonderful  amount 
of  wealth  at  command,  are  so  poor  as  to  have  given  rise  to  the  idea  of  over- 
population ? "  The  answer  is,  that  all  this  power  is  being  wasted  in  the 
effort  to  prevent  the  other  communities  of  the  world,  from  acquiring  similar 
power,  or  wealth.  While  laboring  to  cheapen  the  labor  and  raw  materials 
of  the  exterior  world,  she  is  enslaving  the  people  of  all  countries  subject  to 
her  influence,  and  thus  producing  the  enslavement  of  her  own.  The  harmony 
of  interests  being  everywhere  perfect,  therefore  it  is,  that  every  measure 
tending  to  deprive  the  Hindoo  of  the  power  to  sell  his  labor,  tends  equally 
to  lessen  the  ability  of  the  British  laborer  to  obtain  food  for  his  family  and 
himself.  Action  and  re-action  are  equal  and  opposite  —  the  ball  which  stops 
the  motion  of  another  ball,  being  stopped  itself.  This  is  a  great  physical 
law,  whose  truth  is  obvious  throughout  the  whole  range  of  social  science. 
Common  sense,  common  honesty,  and  sound  policy,  look  always  in  the  same 
direction. 


52  LETTERS   TO   THE 

accomplishment  of  some  common  object.  Combination  of  action 
furnishes  to  every  resident  of  New  York,  Philadelphia,  or  Boston, 
a  slave  employed  in  supplying  him  with  water,  or  with  light,  at  a 
cost  so  trivial  as  to  be  utterly  insignificant,  when  compared  with 
what  it  would  be,  were  he  obliged  to  live  and  labor  alone,  as  did 
the  emigrants  of  the  days  of  William  Penn.  Combined  effort 
enables  us  to  pass  from  the  shores  of  the  Atlantic,  to  the  banks 
of  the  Mississippi,  in  fewer  hours,  and  at  less  expense,  than 
but  a  few  years  since,  were  required  for  going  from  New  York  to 
Washington.  To  such  effort  it  is  due,  that  every  child  is  supplied 
with  instruction,  such  as  would  be  wholly  unattainable  by  the  soli- 
tary settler.  Combination  of  effort  furnishes  Bibles  at  a  price  so 
small,  as  to  place  them  within  the  reach  of  the  poorest  person  in 
the  Union ;  and  it  supplies,  for  two  cents,  a  better  newspaper  than 
could,  but  a  few  years  since,  have  been  purchased  at  any  price. 
To  combination  it  is  due,  that  the  man  of  New  Orleans  can  com- 
municate on  the  instant  with  his  friend  in  Philadelphia  —  thus 
annihilating  both  time  and  space. 

Look  where  we  may,  Mr.  President,  we  find  new  proofs  of  the 
advantage  to  be  derived  from  association  ;  and  yet  men  are  every- 
where seen  flying  from  their  homes,  and  leaving  behind  them  wives 
and  children,  parents  and  relatives  —  each  one  seeming  desirous,  as 
far  as  possible,  to  be  compelled  to  roll  his  own  log,  build  his  own 
house,  and  cultivate  his  lonely  field ;  and  thus  deprive  himself  of  all 
the  benefit  necessarily  resulting  from  combination  with  his  fellow- 
men.  In  the  passage  to  his  solitude,  he  traverses  immense  plains 
abounding  in  the  fuel  by  whose  consumption  he  would  so  much 
increase  his  wealth  and  power — preferring,  apparently,  to  continue 
to  confine  himself  to  the  use  of  his  arm,  when,  by  calling  nature  to 
his  aid,  he  might  be  enabled  to  substitute  the  qualities  of  his  head 
for  those  of  his  arm,  and  pass  from  the  labors  of  the  ox  to  those 

Of  THE  MAN. 

In  no  country  of  the  world,  is  there  so  great  a  voluntary  waste  of 
power  as  in  these  United  States.  In  Ireland  and  India,  in  Turkey 
and  Portugal,  a  similar  waste  takes  place,  but  in  none  of  these, 
is  there  even  a  pretence  that  the  people  direct  their  own  course  of 
action.  Here,  the  reverse  is  the  case,  every  man  being  supposed 
to  constitute  a  portion  of  the  government,  and  to  aid  in  so  directing 
its  action  as  to  enable  him  and  his  neighbors  most  to  profit  by  the 
gifts  of  Providence ;  yet,  here  it  is,  that  men  are  most  disposed 
to  separate  themselves,  each  and  every  one  from  each  and  every 
other  —  thus  forfeiting  all  the  advantages,  that  are  elsewhere 
seen  to  result  from  the  substitution  of  the  natural  forces,  for  those 
of  the  human  arm.  The  waters  of  Niagara,  capable  of  doing  the 
work  of  millions  of  men,  are  allowed  to  run  to  waste ;  and  the 
coal-fields  of  Illinois,  that,  with  the  slightest  effort,  might  be  made 
to  perform  a  hundred  times  more  labor  than  is  now  performed  by 


PRESIDENT   OF   THE    UNITED   STATES.  53 

all  the  people  of  the  Union,  are  held  in  almost  as  light  esteem  as 
would  be  a  similar  quantity  of  gravel,  or  of  sand. 

Domestic  commerce  tends  to  the  development  of  the  treasures 
of  the  earth  —  to  the  utilization  of  every  particle  of  the  matter  of 
which  our  planet  is  composed  —  to  the  development  of  human 
power  —  to  diminution  in  the  value  of  the  commodities  required 
for  the  support  of  man  —  and  to  augmentation  in  his  own  value, 
and  in  that  of  the  land  upon  which  he  is  placed.  At  every  stage 
of  its  progress,  local  centres  acquire  a  larger  attractive  power  — 
the  mill,  the  mine,  the  furnace,  the  rolling-mill,  and  the  grist  and 
cotton  mills,  becoming  the  places  of  exchange,  and  thus  diminish- 
ing the  necessity  for  resorting  to  the  trading  cities  of  the  world. 
The  man  whose  labors  have  been  given  to  the  production  of  wheat, 
is  thus  enabled  to  exchange  directly  with  one  neighbor  who  con- 
verts wheat  into  flour,  and  another  who  has  changed  coal  and 
ore  into  iron ;  with  one  who  has  converted  wool  into  cloth,  and 
another  who  has  made  rags  into  paper — at  once  economizing  the 
cost  of  transportation,  and  obtaining  the  intellectual  commerce 
required  for  enabling  him  to  pass  from  the  cultivation  of  the  poor, 
to  that  of  the  richer  soils. 

The  desires  of  the  trader  look  in  an  opposite  direction  —  tend- 
ing, everywhere,  to  prevent  the  creation  of  local  centres,  and  thus 
to  increase  the  necessity  for  resorting  to  the  great  central  cities 
of  the  world.  Every  stage  of  his  progress  towards  power  is, 
therefore,  attended  by  an  increase  in  the  tax  of  transportation, 
and  a  diminution  in  the  power  of  man — with  constantly  increasing 
exhaustion  of  the  soil,  requiring  resort  to  new  lands,  to  be  in  their 
turn  exhausted. 

According  to  an  eminent  French  economist,  this  country  is, 
like  Poland,  specially  dedicated  to  agriculture,  to  the  exclusion 
of  manufactures.  Such,  too,  having  been  the  opinion  of  some 
of  those  persons  who  most  have  influenced  the  action  of  the  cen- 
tral government,  the  result  is  seen  in  an  universal  impoverishment 
of  the  soil,  and  of  its  owners,  because  of  the  enormous  tax  of  trans- 
portation to  which  they  have  been  subjected.  According  to  these 
gentlemen,  the  raising  of  raw  produce  is  the  chief  pursuit  of  man, 
and  yet,  small  reflection  could  be  required  for  satisfying  them, 
that  the  raising  of  wheat  was  but  one  of  the  steps  towards  the 
making  of  bread ;  and  that  the  raising  of  cotton  was  but  a  stage 
in  the  process  of  producing  cloth — cloth  and  bread,  and  not  wheat 
or  wool,  being  the  commodities  required  for  his  use.  Men  perish 
of  cold  where  trees  most  abound,  because  of  the  absence  of  the 
saw,  or  the  axe ;  and  other  men  go  naked,  though  surrounded  by 
plants  yielding  cotton,  because  of  their  distance  from  the  spinning- 
jenny  and  the  loom.  Man  is  placed  on  this  earth  to  subject  the 
forces  of  nature  to  his  service  —  compelling  her  to  yield  the  com- 
modities required  for  his  use,  and  in  exchange  for  the  smallest 


54  LETTERS   TO   THE 

possible  amount  of  human  effort.  That  that  otject  may  be  accom- 
plished, he  is  required  to  combine  his  efforts  with  those  of  his 
fellow-men  —  the  farmer,  the  miller,  and  the  baker,  uniting  for  the 
production  of  bread ;  the  shepherd,  the  spinner,  and  the  weaver, 
uniting  for  the  production  of  cloth.  The  more  perfect  that 
union,  the  less  is  the  waste  of  labor  in  transportation  and  in  effect- 
ing exchanges,  and  the  greater  the  power  to  improve  the  land 
already  occupied,  while  extending  the  work  of  cultivation  over  the 
richer  soils  —  as  is  now  being  done  in  France,  Denmark,  Germany, 
and  other  of  the  advancing  countries  of  Europe.  The  less  the 
power  of  combination,  the  greater  is  the  tendency  to  exhaustion 
of  the  soil,  as  is  seen  to  be  the  case  in  Poland  and  Ireland, 
Turkey  and  Portugal,  Jamaica  and  India,  and  every  other  country 
that,  like  the  United  States,  gives  itself,  almost  exclusively,  to  the 
work  of  scratching  the  earth.  Of  all  the  raw  material  required 
for  the  purposes  of  man,  manure  is  the  most  important,  and  the 
least  susceptible  of  transportation  to  a  distance ;  and  therefore  is 
it,  that  poverty,  depopulation,  and  slavery,  are  the  necessary 
consequences  of  the  reduction  of  a  community  to  dependence  on 
the  single  species  of  effort  required  for  compelling  the  earth  to 
yield  the  raw  material  of  clothing,  or  of  food.  Throughout  the 
larger  portion  of  the  Union,  the  market  is  distant  hundreds  and 
thousands  of  miles,  and  the  consequences  are  seen  in  the  fact,  that 
the  soil  is  becoming  almost  everywhere  exhausted  —  wealth  thus 
diminishing,  when  it  should  increase. 

How  it  diminishes,  has  recently  been  shown  by  an  eminent  agri- 
culturist, from  whom  we  learn  : 

That,  the  potash  and  phosphoric  acid  annually  taken  from  the 
land,  is  worth,  at  the  usual  market  price  of  these  commodities, 
nearly  $20,000,000  —  scarcely  any  of  which  is  ever  returned  : 

That,  the  ashes  of  600,000,000  of  bushels  of  corn  are  annually 
taken  from  the  soil  —  scarcely  any  of  which  are  ever  returned  : 

That,  the  total  annual  waste  of  the  mineral  constituents  of  food, 
is  "equal  to  1,500,000,000  bushels  of  corn." 

"  To  suppose,"  says  the  author  of  these  estimates  —  "to  sup- 
pose that  this  state  of  things  can  continue,  and  we,  as  a  nation, 
remain  prosperous,  is  simply  ridiculous.  We  have  as  yet  much 
virgin  soil,  and  it  will  be  long  ere  we  reap  the  reward  of  our 
present  improvidence.  It  is  merely  a  question  of  time,  and  time 
will  solve  the  problem,  in  a  most  unmistakable  manner.  What 
with  our  earth-butchery  and  prodigality,  we  are  each  year  losing 
the  intrinsic  essence  of  our  vitality. 

"  Our  country  has  not  yet  grown  feeble  from  this  loss  of  its 
life-blood,  but  the  hour  is  fixed  when,  if  our  present  system  con- 
tinue, the  last  throb  of  the  nation's  heart  will  have  ceased,  and 
when  America,  Greece,  and  Home,  will  stand  together  among  the 
ruins  of  the  past. 


PRESIDENT   OF   THE    UNITED    STATES.  55 

"The  question  of  economy  should  be,  not  how  much  do  we 
annually  produce,  but  how  much  of  our  annual  productions  is 
saved  to  the  soil.  Labor  employed  in  robbing  the  earth  of  its 
capital  stock  of  fertilizing  matter,  is  worse  than  labor  thrown 
away.  In  the  latter  case,  it  is  a  loss  to  the  present  generation  — 
in  the  former,  it  becomes  an  inheritance  of  poverty  for  our  suc- 
cessors. Man  is  but  a  tenant  of  the  soil,  and  he  is  guilty  of  a 
crime  when  he  reduces  its  value  for  other  tenants  who  are  to  come 
after  him." 

Waste,  such  as  is  here  described,  Mr.  President,  is  a  crime,  and 
it  finds  its  punishment  in  the  natural,  moral,  and  political  decline, 
to  which  your  attention  has  now  been  called.  Look,  almost, 
where  the  traveller  may,  he  is  struck  with  the  wretched  condition 
of  that  which,  in  this  country,  is  called  agriculture  —  but  which, 
in  the  civilized  countries  of  Europe,  would  be  denominated  pure 
and  simple  robbery  of  the  great  bank,  given  by  the  Creator  for 
the  use  of  man.  Its  effects  are  shown  in  the  facts,  that,  in  New 
York,  where,  eighty  years  since,  25  to  30  bushels  of  wheat  wer*1 
an  ordinary  crop,  the  average  is  now  only  14,  while  that  of  Indian 
corn  is  but  25.  In  Ohio,  a  State  that,  but  half  a  century  since, 
was  a  wilderness,  the  average  of  wheat  is  less  than  12 ;  and  it  dimi- 
nishes, when  it  should  increase.  Throughout  the  West,  the  pro- 
cess of  exhaustion  is  everywhere  going  on  —  the  large  crops  of  the 
early  period  of  a  settlement,  being  followed,  invariably,  by  smaller 
ones  in  later  years.  In  Virginia,  throughout  a  large  district  of 
country  once  considered  the  richest  in  the  State,  the  average  of 
wheat  is  less  than  seven  bushels ;  while  in  North  Carolina,  men  cul- 
tivate land  yielding  little  more  than  that  quantity  of  Indian  corn. 
Tobacco  has  been  raised  in  Virginia  and  Kentucky,  until  the 
land  has  been  utterly  exhausted  and  abandoned  ;  while  through- 
out the  whole  cotton-growing  country,  we  meet  with  a  scene  of 
exhaustion  unparalleled  in  the  world,  to  have  been  accomplished 
in  so  brief  a  period.  The  people  who  raise  cotton  and  tobacco 
are  living  upon  capital  —  selling  their  soil'  at  prices  so  low,  that 
they  do  not  obtain  one  dollar  for  every  five  destroyed ;  and  as 
man  is* always  a  progressive  animal,  whether  his  course  be  up- 
ward or  downward,  we  may  now  readily  understand  the  cause 
of  the  steady  and  regular  growth  of  that  feeling  which  leads  to 
regarding  bondage  as  being  the  natural  condition  of  those  who 
need  to  sell  their  labor.  The  supremacy  of  trade  leads  necessa- 
rily to  such  results ;  and,  as  the  whole  energies  of  the  country  are 
given  to  the  enlargement  of  the  trader's  power,  and  to  the  aug- 
mentation of  the  tax  of  transportation,  it  is  no  matter  of  sur- 
prise that  its  people  are  everywhere  seen  to  be  employed  in 
"  robbing  the  earth  of  its  capital  stock."  Let  the  existing  system 
be  continued,  and  "the  hour  is  surely  fixed,"  when,  in  the  words 
of  the  writer  quoted  above,  "America,  Greece,  and  Rome,  will 
stand  together  among  the  ruins  of  the  past." 


56  LETTERS   TO   THE 

Allow  me  now,  Mr.  President,  to  call  yonr  attention,  once  again, 
to  the  diagram  given  in  a  former  letter.  Looking  at  it,  you  find, 
at  the  left,  production  small,  and  the  prices  of  the  ruder  products 
of  the  earth,  very  low  indeed.  Passing  towards  the  right,  you 
find,  in  Massachusetts,  production  larger,  and  prices  higher — the 
farmer  obtaining  a  greater  number  of  bushels,  and,  for  each  bushel, 
a  larger  quantity  of  money.  That  is  the  road  towards  the  im- 
provement in  manners  and  morals,  to  which  we  attach  the  idea 
of  civilization.  The  contrary  road — from  the  right  to  the  left — 
is  the  one  which  leads  to  that  state  of  demoralization,  to  which 
we  attach  the  idea  of  barbarism  —  the  products  of  the  earth  then 
diminishing  in  quantity,  with  steady  decline  of  prices.  This  last, 
Mr.  President,  is  the  road  which,  under  the  guidance  of  the  cen- 
tral government,  we  are  travelling ;  and  therefore  it  is,  that  each 
successive  year  brings  with  it  new  attacks  upon  the  local  powers, 
and  new  increase  of  the  central  power,  with  constant  decline  in 
the  respect  for  the  Constitution,  and  in  the  regard  for  individual 
rights.  Men,  Mr.  President,  become  free,  and  communities  rise 
in  the  estimation  of  the  world,  in  the  ratio  of  their  development 
of  a  real  agriculture.  Both  deteriorate  in  the  ratio  in  which 
they  find  themselves  driven  to  the  work  of  robbing  the  soil. 
This  I  propose  to  show  in  another  letter — remaining,  meanwhile, 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  January  \lth,  1858. 


PRESIDENT   OF  THE   UNITED   STATES.  57 


LETTER  ELEVENTH. 

. 

ALL  raen,  Mr.  President,  desire  to  maintain  commerce  with 
each  other  —  exchanging  ideas  and  services,  or  commodities,  in 
which  those  services  are  embodied.  Some  men  desire  to  be 
employed  in  effecting  exchanges  for  other  men  —  standing  be- 
tween them,  in  the  various  capacities  of  sailor  and  wagoner, 
trader  and  transporter,  all  of  whom  are  merely  instruments  to  be 
used  by  commerce. 

The  greater  the  diversity  in  the  employments  of  society,  the 
greater  is  the  power  to  maintain  commerce,  and  the  less  is  the 
necessity  for  the  use  of  the  instruments  above  referred  to  —  the 
greater  is  the  tendency  towards  increase  in  the  productiveness  of 
the  soil — the  larger  is  the  return  to  agricultural  labor — the  higher 
are  the  prices  of  the  rude  products  of  the  land  —  the  cheaper 
become  those  finished  commodities  required  for  the  use  of  the 
farmer  —  and  the  greater  is  the  tendency  towards  that  improve- 
ment of  human  condition,  to  which  we  are  accustomed  to  attach 
the  idea  of  civilization. 

The  less,  Mr.  President,  the  diversity  of  employments,  the 
greater  is  the  necessity  for  the  services  of  the  ship  and  the  wagon, 
the  trader  and  transporter  —  the  less  is  the  commerce  —  the 
greater  is  the  tendency  towards  exhaustion  of  the  soil  —  the 
smaller  is  the  return  to  agricultural  labor  —  the  lower  are  the 
prices  of  the  rude  products  of  the  land  —  the  dearer  are  clothing, 
knives,  axes,  and  other  finished  products  —  and  the  greater  is  the 
tendency  towards  that  deterioration  of  man's  condition  to  which 
we  are  accustomed  to  attach  the  idea  of  barbarism. 

The  great  fact  is  thus  presented  to  us,  that  where  the  land 
yields  most  largely,  there  the  prices  of  the  products  of  the  farm 
are  highest ;  whereas,  where  it  yields 'least  in  quantity,  there  the 
prices  are  lowest.  —  In  Germany  and  Prance,  the  yield  of  the 
land  is  steadily  increasing,  while  prices  regularly  advance.  In 
this  country,  the  yield  decreases,  while  prices  as  steadily  decline. 
Hence  it  is,  Mr.  President,  that  the  phenomena  presented  to  view 
by  French  and  German  society,  are  those  of  growing  civilization ; 
while  those  we  meet  among  ourselves,  are  those  of  advancing 
barbarism. 

Approximation  in  the  prices  of  the  rude  products  of  the  earth, 
and  of  the  finished  commodities  required  for  human  purposes,  is, 
Mr.  President,  the  most  conclusive  proof  of  growth  in  civilization. 
The  more  nearly  they  come  together,  the  more  does  society 
tend  to  assume  its  natural  form  —  the  greater  is  the  tendency 
towards  steadiness  and  regularity  of  movement  —  and  the  more 
rapid  is  the  advance  in  wealth,  and  power.  The  more  they  recede 


58  LETTERS  TO   THE 

from  each  other,  the  more  does  society  tend  to  take  the  form  of 
an  inverted  pyramid,  the  less  is  the  regularity  of  movement,  the 
greater  is  the  tendency  towards  barbarism,  and  the  more  rapid  is 
the  decline  in  wealth  and  power.  With  us,  as  you  have  seen,  those 
prices  do  recede  —  more  cotton  and  more  flour  being,  as  a  rule, 
required  to  pay  for  any  given  quantity  of  iron,  copper,  tin,  or 
lead  — the  most  essential  of  the  commodities  required  for  advance 
in  civilization  —  than  was  needed,  for  that  purpose,  half  a  cen- 
tury since. 

The  closer  that  approximation,  the  greater  is  everywhere  the 
tendency  to  increase  in  the  productiveness  of  the  soil  —  with 
growing  power  of  association  and  combination.  The  more  re- 
mote they  are,  the  greater  is  the  tendency  towards  exhaustion  of 
the  soil,  with  declining  power  of  combination.  Throughout  the 
Union,  that  power  is  declining ;  and  thus  are  we  presented  with 
another  of  the  phenomena  which,  everywhere  else,  have  attended 
declining  civilization. 

The  more  the  soil  becomes  enriched,  the  greater  is  its  power 
of  attraction,  the  more  rapid  is  the  growth  of  commerce,  and  the 
more  civilizing  are  the  tendencies  of  the  time.  The  more  it  is 
impoverished,  the  greater  is  its  repulsive  power,  the  slower  be- 
comes the  movement  of  society,  and  the  more  rapid  is  the  decline 
of  civilization.  With  us,  Mr.  President,  as  you  have  seen,  the 
attractive  power  of  the  soil  diminishes,  and  men  are  almost  every- 
where flying  from  each  other,  as  if  from  pestilence  —  the  enormous 
emigrations  of  the  barbarous  ages  of  Europe  being  here  repro- 
duced, and  affording  conclusive  evidence  of  decline  in  wealth, 
strength,  and  power.  What  are  the  lesser  phenomena  by  which 
decay  is  manifested,  and  how  they  influence  the  various  portions 
of  society,  we  may  now  inquire. 

At  the  return  of  peace  in  1815,  land  was  high  in  price  —  a 
market  having  been  already  made  at  home,  for  the  most  important 
of  its  products.  Protection  being  discontinued,  that  market  dis- 
appeared, and  the  result  was  seen,  six  years  later,  in  the  almost 
universal  ruin  of  the  farmers  — judgments  being  everywhere  en- 
tered up  —  mortgages  being  foreclosed  —  sheriffs'  sales  abound- 
ing to  such  an  extent  as,  at  length,  to  force  the  people  of  the 
agricultural  States  to  the  adoption  of  laws  for  staying  the  execu- 
tion of  the  judgments  of  their  courts — and  land  falling  to  a  fourth 
of  the  price  at  which  it  had  sold,  but  seven  years  before.  The 
sales  of  public  land,  and  the  revenue  therefrom,  had  trebled  in 
the  period  from  1814  to  1818-19  —  thus  increasing  the  number 
of  farmers,  at  the  moment  when  the  market  for  their  products  was 
gradually  disappearing  —  and  thus  preparing  the  way  for  that 
decline  in  the  price  of  the  products  of  the  farm,  whose  steady 
progress  is  exhibited  in  the  figures  already,  Mr.  President,  laid 
before  you. 

By  1824,  the  land  revenue  had  fallen  to  less  than  a  third  of  the 


PRESIDENT   OF   THE   UNITED   STATES.  59 

amount  at  which  it  had  stood  in  1819.  Thenceforward  —  protec- 
tion having  been  re-established  —  it  went  gently  up,  until,  in  1832 
and  1833,  it  averaged  $3,295,000 ;  or,  almost  precisely  the  amount 
it  had  so  suddenly  attained  thirteen  years  before.  In  the  mean 
time,  the  population  had  increased  about  two-thirds  ;  and  so 
regular  had  been  the  increase  in  the  home  demand  for  food,  that 
now,  for  the  first  time  in  the  country's  history,  its  price  was 
wholly  uninfluenced  by  the  fall  of  foreign  markets.  From  1828 
to  1831,  wheat,  in  England,  had  been  high  —  averaging  £3  4s.  3d. 
per  quarter,  or  $1.72  per  bushel.  From  that  period,  it  fell  regu- 
larly, until,  four  years  later,  it  was  but  £1  19s.  4rf. ,  or  $1.05  per 
bushel ;  and  yet,  the  price  of  flour  in  the  American  ports  remained 
entirely  unaffected ;  as  is  shown  by  the  following  figures,  derived 
from  a  recent  Treasury  Report :  — 

Average  of  1828  to  1831 $5.84 

1832   $5.87  1834  $5.50  \  K  79 

1833  5.50  1835  6.00  /  

The  Compromise  tariff  having  now,  however,  begun  to  operate, 
mills  ceased  to  be  built,  and  importations  rapidly  increased.  The 
mechanic  arts  no  longer  affording  an  outlet  for  the  growing  popu- 
lation, emigration  to  the  West  grew  rapidly,  accompanied  by 
enormous  speculations  in  the  public  lands  —  the  speculator  always 
desiring  to  go  in  advance  of  the  poor  settler,  and  to  profit  at  his 
expense.  The  land  revenue  rose  from  $4,000,000  to  $14,000,000, 
and  $24,000,000;  after  which,  for  four  succeeding  years,  it  ave- 
raged $5,000,000  ;  and  thus,  in  six  years,  was  more  land  disposed 
of,  than  had  been  sold  in  the  forty  preceding  ones.  The  conse- 
quences were  such  as  might  have  been  expected.  While  the  new 
farms  were  being  created,  by  help  of  labor  diverted  from  the  old 
ones,  food  was  scarce  and  high  ;  but  by  the  time  they  were  ready 
to  furnish  supplies,  their  owners  found  their  market  had  dis- 
appeared. Land  again  falling  in  price,  mortgages  were  fore- 
closed ;  and  once  again,  were  farmers,  by  tens  of  thousands,  turned 
adrift  upon  the  world,  to  recommence  their  labors  as  they  might. 
We  have  here  the  second  great  stage  of  preparation,  for  the  extra- 
ordinary fall  in  the  price  of  food  that  has  been  exhibited. 

The  land  revenue  now  (1842)  fell  to  little  more  than  a  single 
million,  from  which  point,  under  the  protective  tariff  of  that  year 
it  rose  gradually  until,  five  years  later,  it  stood  again  at  $3, 000, 000. 
Soon  after,  the  discovery  of  the  treasures  of  California  came  in  to 
make  demand  for  manufactures,  and  to  give  activity  to  commerce. 
So  long  as  that  activity  continued,  the  sales  of  public  lands 
continued  small,  but  now  —  the  building  of  mills  and  furnaces 
having  ceased  —  the  revenue  from  that  source,  in  the  three  years 
ending  with  1856,  had  attained  an  average  of  nearly  $10,000,000. 
If  to  this,  be  added,  the  sales  of  land  granted  to  railroad  com- 
panies, we  obtain  a  total  for  those  years  of  at  least  $50  000,000 ; 


60  LETTERS   TO   THE 

or  twice  the  amount  of  the  twelve  years  from  1840  to  1852. 
Those  sales  are  an  index  to  the  exhaustion  of  the  soil,  the  dis- 
persion of  the  people,  the  decline  of  commerce,  and  the  growth 
of  the  power  of  the  trader  ;  and  as  those  of  1818  were  followed 
by  the  agricultural  ruin  of  1821,  and  those  of  1836  by  the  ruin 
of  1841,  so  must  those  of  1854-56  be  followed  by  similar  effects, 
at  a  period  that  is  now  but  little  distant.  As  a  rule,  the  highest 
prices  have  always  been  followed  by  the  lowest  ones — those  of 
the  free  trade  period  of  1822  having  followed  those  of  the  protec- 
tive one  of  1816 — the  ruinous  prices  of  1842  and  1843  having 
followed  those  of  1837  and  1838  —  and  the  exceedingly  low  one 
of  1852  having  followed  closely  upon  the  elevated  ones  of  1847 
and  1848.  With  each  successive  crisis,  too,  the  price  established 
at  its  close,  has  been  lower  than  that  of  previous  periods.  As  yet, 
1852  occupies  the  lowest  place;  but  the  day  is  fast  approaching, 
Mr.  President,  when,  should  Heaven  smile  upon  the  labors  of  our 
farmers,  they  will  look  with  regret,  even  to  the  low  prices  of  the 
years  from  1850  to  1852.  The  more  they  exhaust  the  soil,  the 
greater  will  be  the  tendency  towards  decline  of  price. 

Instability  and  irregularity  being  the  essential  characteristics 
of  barbarism,  there  can  be  no  real  agriculture  where  they  are 
found.  The  farmer,  more  than  any  other  member  of  the  community, 
requires  stability  —  his  investments  being  generally  made  a  year, 
or  more,  in  advance.  The  trader  buys  flour  one  day,  and  sells  it 
on  the  next ;  but  the  farmer  needs  to  determine  in  the  autumn, 
in  what  manner  he  will  appropriate  his  land,  for  the  year  to  come. 
The  price  of  wheat  falling  and  that  of  tobacco  rising,  he  can 
make  no  change ;  but  the  trader  can  —  selling  the  one  at  the  first 
appearance  of  a  downward  movement,  and  buying  the  other  at 
the  first  appearance  of  an  upward  one.  The  skilful  trader  desires 
change,  and  the  more  frequent  its  recurrence,  the  more  numerous 
are  his  chances  for  accumulating  fortune ;  but  instability  is  ruinous 
to  the  farmer  and  the  planter.  The  objects  of  the  farmer  and 
trader  are,  thus,  widely  different ;  and  yet  the  former  appears  most 
generally  before  the  world  as  the  advocate  of  his  own  subjection 
to  the  dominion  of  trade,  and  as  the  opponent  of  the  policy  that 
is  based  upon  the  idea  of  the  extension  of  domestic  commerce,  and 
consequent  emancipation  of  his  land  from  the  oppressive  tax  of 
transportation.  Hence  it  is,  that  we  meet  with  those  conclusive 
evidences  of  declining  civilization  which  are,  in  one  part  of  the 
Union,  supplied  by  the  growing  belief  in  the  divine  origin  of 
slavery,  and  in  the  necessity  for  its  continuance ;  and  in  the  other, 
by  the  facts,  that  in  the  older  States,  property  in  land  becomes 
more  consolidated  ;  that  in  all  of  them,  the  poor  rent-paying 
tenant  is  taking  the  place  of  the  small  proprietor ;  that,  almost 
everywhere,  exhaustion  of  the  soil  is  proceeding  with  accelerated 
rapidity ;  and  that  men  are,  everywhere,  more  and  more  com- 
pelled to  relinquish  the  advantages  of  that  combination  with  their 


PRESIDENT   OF   THE    UNITED    STATES.  61 

fellow-men,  to  which,  alone,  they  can  look  for  the  power  to  call 
the  great  forces  of  nature  to  their  aid. 

The  coal-miner,  the  smelter  of  ores,  the  cotton  and  woollen 
manufacturer,  and  all  others  engaged  in  the  work  of  production, 
are,  Mr.  President,  like  the  farmer  in  the  fact  that  they  need 
stability  and  regularity  —  giving  a  steady  circulation  of  labor  and 
its  products,  and  increasing  their  ability  to  add  to  the  machinery 
required  for  their  operations.  That  having  been  obtained,  they 
are  enabled,  in  each  successive  year,  to  profit  by  the  experience 
of  the  past,  and  to  give  to  the  farmer  a  constantly  increasing 
quantity  of  cloth,  in  exchange  for  a  constantly  diminishing  quan- 
tity of  food  and  wool  —  the  prices  of  the  two  tending  steadily  and 
regularly  to  approach  each  other.  That  stability,  and  that  regu- 
larity of  circulation,  have,  however,  been  to  the  people  of  the 
United  States,  things  entirely  unknown.  At  times,  as  in  the  two 
periods  ending  in  1835  and  1847,  it  has  been  approached,  but, 
in  every  case,  it  has  proved  but  a  mere  lure,  for  inducing  men 
of  skill  and  enterprise  to  waste  their  fortunes,  and  their  time,  in 
the  effort  to  advance  the  interests  of  the  community,  with  ruin  to 
themselves. 

From  1810  to  1815,  mills  and  furnaces  were  built,  but  with 
the  return  of  peace,  their  owners  —  embracing  large  and  small 
capitalists,  working-men  and  others,  the  most  useful  portions  of 
the  community  —  were  everywhere  ruined,  and  the  people  who 
had  been  employed  were  turned  adrift,  to  seek  in  the  West  the  sup- 
port they  could  no  longer  find  at  home.  Land  sales  then,  as  we 
have  seen,  became  large,  and,  next,  the  farmer  suffered  as  the 
manufacturer  had  done  before.  From  1828  to  1834,  such  esta- 
blishments were  again  erected,  and  the  metallic  treasures  of  the 
earth  were  being  everywhere  developed ;  but,  as  before,  the  pro- 
tective system  was  again  abandoned,  with  ruin  to  the  manufac- 
turer, accompanied  by  enormous  sales  of  public  land,  and  fol- 
lowed by  ruin  to  the  farmer.  From  1842  to  1847,  mills  and 
furnaces  were  again  constructed ;  and  then,  from  1848  to  1850, 
they  were  again  closed;  the  effect  being  seen,  in  1850-52,  in 
the  fall  of  flour  to  a  price  lower  than  had  ever  before  been  known. 
The  perfect  harmony  of  all  true  interests,  and  the  absolute  neces- 
sity for  protection  to  the  farmer,  in  his  efforts  to  bring  the  artisan 
to  his  side,  and  thus  relieve  himself  from  the  heavy  taxation  to 
which  he  is  now  subjected,  are  here  exhibited  in  the  strongest 
light.  No  one,  who  studies  the  regular  sequence  of  these  facts, 
can  hesitate  as  to  full  belief  in  that  portion  of  the  doctrine  of 
The  Wealth  of  Nations,  which  teaches,  that  the  English  system, 
based  as  it  is  upon  the  idea  of  cheapening  all  the  raw  materials 
of  manufacture,  "  is  a  manifest  violation  of  the  most  sacred  rights 
of  mankind." 

In  the  last  ten  years,  few  mills  or  furnaces  have  been  erected — 
the  yalue  of  those  iu  existence  having  been,  in  general,  so  far 


62  LETTERS   TO    THE 

below  the  cost  of  production,  as  to  have  afforded  no  reason  for 
making  any  addition  to  their  number. 

The  history  of  industry  in  no  civilized  country  of  the  world 
presents  such  a  scene  of  destruction  as  is  found  in  the  manu- 
facturing, mining,  and  railroad  operations  of  the  Union.  Of 
all  the  persons  concerned  in  making  those  great  improvements 
required  for  diminishing  the  distance  between  the  consumer  and 
the  producer  —  for  enabling  the  producers  of  wool,  flax,  and  food 
readily  to  exchange  for  cloth  and  iron  —  and  for  reducing  the 
prices  of  manufactured  commodities,  while  raising  those  of  the 
raw  products  of  the  earth  —  a  large  majority  have  been  ruined; 
and  the  result  is  seen  in  the  facts,  that  the  various  metals  are 
rising  in  price,  as  compared  with  flour  and  cotton  —  that  our 
farmers,  as  a  rule,  are  poor  —  that,  with  each  successive  year,  the 
land  is  being  more  rapidly  exhausted  —  and,  that  the  country 
exhibits  so  many  other  evidences  of  declining  civilization. 

Careful  study  of  these  facts,  Mr.  President,  will  enable  you, 
readily,  to  understand  the  causes  of  the  demoralization  now 
making  such  rapid  progress.  The  policy  of  the  country  be- 
ing wholly  adverse  to  the  growth  of  manufactures,  agriculture 
remains,  and  necessarily,  in  its  rudest  state  —  offering  no  attrac- 
tion for  men  of  any  cultivation.  Seeking  a  pursuit,  our  young 
men  shrink  from  one  that  involves  so  large  an  amount  of  labor, 
and  is  so  badly  paid.  Looking,  next,  to  the  production  of  iron, 
or  the  manufacture  of  cloth,  they  see  that  most  of  the  men  who 
have  been  so  engaged,  have  reaped  but  ruin  as  the  result.  Thus 
limited  in  their  choice  of  employments,  they  find  themselves  driven 
to  becoming  clerks,  traders,  lawyers,  or  doctors ;  and  the  conse- 
quences are  seen  in  the  fact,  that  we  have  five  times  more  traders, 
lawyers,  and  doctors,  than  can  obtain  a  living  by  any  honest 
means.  All,  however,  must  live  —  honestly  if  they  can,  but  dis- 
honestly if  they  must ;  and  hence  it  is,  that  the  race  of  sharpers 
and  blacklegs,  speculators  and  swindlers,  slave  traders  and  filli- 
busters,  counterfeiters  and  peculator's,  increases  with  such  rapidity. 
It  is  safe,  Mr.  President,  to  say,  that  with  the  present  policy  of  the 
central  government  is  inseparably  connected,  a  greater  develop- 
ment of  the  merely  appropriative  powers,  and  a  greater  tendency 
towards  decline  in  the  security  of  person  and  property,  than  can 
be  found  in  any  country  of  the  world,  claiming  to  be  held  as 
civilized. 

This  is  a  sad  picture,  Mr.  President,  but  that  it  is  a  true  one, 
you  have  abundant  evidence  in  the  proceedings  of  the  world 
around  you. 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  January  13th,  1858. 


I 

PRESIDENT   OF   THE   UNITED   STATES.  63 


LETTER   TWELFTH. 

"  THIRTY-ONE  independent  States,  enjoying  a  thousand  advan- 
tages, are  mutually  engaged  in  a  free  trade  with  each  other. 
That,  is  the  free  trade  we  want!" — Such,  Mr.  President,  was 
the  most  accurate  view  of  the  great  and  pressing  ' '  want "  of 
your  countrymen,  presented  by  yourself,  but  a  few  years  since. 
Seeing  most  clearly,  as  you  then  did,  the  enormous  amount  of 
taxes  paid  by  our  farmers,  in  the  form  of  transportation,  commis- 
sions, and  other  charges  —  the  necessary  consequence  of  depend- 
ence upon  distant  markets  —  it  was  to  you  most  obvious,  that 
what  they  really  needed  was,  commerce  among  the  States  —  com- 
merce within  the  States  —  commerce  in  towns  and  villages  —  that 
commerce  which,  in  other  countries,  enables  men  to  exchange 
with  each  other,  ideas,  services,  and  products,  with  little  charge  for 
intermediate  agency  ;  and  thus  to  emancipate  themselves,  almost 
entirely,  from  the  grinding  taxes  of  trade  and  transportation. 

What,  however,  is  it,  that  has  given  to  those  thirty-one  States 
the  power  to  maintain  any  commerce  whatsoever  ?  Is  it  not, 
Mr.  President,  a  consequence  of  diversity  in  their  modes  of 
employment,  resulting  from  the  fact,  that,  while  one  portion  of 
the  country  is  fitted  for  raising  cotton  or  sugar,  others  are  better 
suited  to  raising  wheat,  rice,  corn,  barley,  or  grass  —  that  while 
the  soil  of  one  is  underlaid  with  coal,  that  of  others  is  underlaid 
with  lead  or  copper,  marl  or  lime  ?  That  such  is  the  case,  is 
beyond  all  doubt.  That  without  difference  there  can  be  no 
commerce,  is  shown  by  the  facts,  that  the  cotton  planter  of  Caro- 
lina maintains  no  commerce  with  his  fellow  planter  of  Georgia, 
and  that  the  farmer  of  Illinois  makes  no  exchanges  with  his 
fellow  farmer  of  Indiana. 

What,  however,  is  the  actual  amount  of  commerce  among  the 
States  ?  How  much  does  Kentucky  exchange  with  Missouri  ? 
What  is  the  annual  value  of  the  commerce  of  Ohio  with  Indiana — 
of  Virginia  with  Kentucky  ?  Scarcely  more,  as  I  imagine,  than 
that  of  a  single  day's  labor  of  their  respective  populations;  and, 
perhaps,  not  even  half  so  much.  —  Why,  Mr.  President,  is  this 
the  case  ?  Is  it  not  a  necessary  consequence  of  the  absence  of 
that  diversity  of  employments  within  the  States,  which  we  see, 
everywhere,  to  be  so  indispensable  to  the  maintenance  of  com- 
merce ?  Assuredly  it  is.  Ohio  and  Indiana  have  little  more 
than  one  pursuit —  that  of  scratching  out  the  soil,  and  exporting 
it  in  the  form  of  food.  Virginia  and  Kentucky  have  the  same 
pursuits  —  selling  their  soil  in  the  forms  of  tobacco  and  of  corn. 
Carolina  and  Alabama  have  the  same  pursuits ;  and  so  it  is 
throughout  by  far  the  larger  portion  of  the  Union  —  millions  of 


64  LETTERS  TO   THE 

people  being  employed  in  one  part  of  it,  in  robbing  the  earth  of 
the  constituents  of  cotton,  while  in  others,  other  millions  are  em- 
ployed in  plundering  the  great  treasury  of  nature,  of  the  constitu- 
ents of  wheat  and  rice,  corn  and  tobacco,  and  thus  destroying, 
for  themselves  and  their  successors,  the  power  to  maintain  commerce. 

The  commerce  of  State  with  State  is,  thus,  Mr.  President,  but 
small ;  and  the  reason  why  it  is  so,  is,  that  the  commerce  of  man 
with  his  fellow  man,  within  the  States,  as  a  general  rule,  is  so 
exceedingly  diminutive.  Were  the  people  of  Illinois  enabled  to 
develope  their  almost  boundless  deposits  of  coal  and  iron  ore, 
and  thus  to  call  to  their  aid  the  wonderful  power  of  steam,  the 
internal  commerce  of  the  State  would  grow  rapidly — making  a 
market  at  home  for  the  food  produced,  and  enabling  its  producer 
to  become  a  large  consumer  of  cotton.  Cotton  mills  then  grow- 
ing up,  bales  of  cotton  wool  would  travel  up  the  Mississippi,  to 
be  given  in  exchange  for  the  iron  required  for  the  roads  of 
Arkansas  and  Alabama,  and  for  the  machinery  demanded  for  the 
construction  of  cotton  and  sugar  mills,  in  Texas  and  Louisiana. 

That,  Mr.  President,  as  you  so  well  have  said,  is  the  sort  of 
free  trade  that  we  really  require.  It  grew  with  great  rapidity,  in 
the  period  ending  in  1816  —  that  period  in  which  the  domestic 
market  absorbed  so  large  a  proportion  of  cotton  that  was  pro- 
duced. It  died  away,  in  the  years  that  followed,  from  1817 
to  1824,  when  mills  and  furnaces  were  closed,  and  mechanics 
were,  everywhere  throughout  the  country,  suffering  for  want  of 
food.  It  grew  again,  in  the  period  from  1824  to  1834,  when 
the  product  of  iron  rose  to  200,000  tons,  and  thus  enabled  the 
farmers  of  the  country  to  double  their  demands  for  the  products 
of  the  plantation.  It  declined  from  1834  to  1842  —  the  period, 
during  which,  the  domestic  production  of  iron,  and  the  domestic 
consumption  of  cotton,  remained  almost  unchanged  in  quantity, 
notwithstanding  an  addition  of  25  per  cent,  to  our  population  — 
It  grew  again,  from  1842  to  1848 — the  domestic  production 
of  iron  having  in  that  brief  period  almost  quadrupled,  while  the 
domestic  demand  for  cotton  doubled.  It  has  now  declined  — 
the  production  of  iron  being  less  than  it  was  five  years  since,  and 
the  demand  for  cotton  being,  at  this  moment,  not  greater,  prob- 
ably, than  it  was  in  1842,  when  our  numbers  were  little  more 
than  half  as  great  as  they  are  at  the  present  hour. 

We  have  now,  probably,  thirty  millions  of  people,  occupying 
the  thirty-one  States,  of  which,  Mr.  President,  you  spoke ;  and 
yet,  among  them  all,  there  is,  at  the  present  time,  almost  literally, 
no  commerce. — The  planter  stores  his  cotton  —  waiting  for  better 
prices.  For  the  same  reason,  the  farmer  houses  his  wheat  and 
his  corn.  Neither  of  them,  therefore,  is  able  to  purchase  cloth 
or  iron.  The  iron  master,  as  a  consequence,  is  forced  to  close 
his  furnace,  and  the  maker  of  cloth  closes  his  mill.  Wages 
ceasing  to  be  paid,  the  owner  of  houses  receives  no  rent.  Houses 


PRESIDENT   OP  THE   UNITED   STATES.  65 

ceasing  to  be  built,  the  unemployed  mason  and  carpenter  take 
their  places  by  the  side  of  the  already  discharged  workers  in  wool 
and  cotton,  in  coal  and  iron.  Commerce  thus  perishes ;  and  this 
it  does,  because  our  rulers,  Mr.  President,  have  been  led  to  believe 
that  national  wealth  and  power  were  to  be  obtained,  as  the  results 
of  measures  directly  the  reverse  of  those  so  plainly  indicated  by 
yourself,  at  the  opening  of  the  Central  railroad,  but  a  few  years 
since.  You,  then,  most  clearly  saw,  that  what  we  needed  was,  the 
establishment  of  that  entire  freedom  of  commerce  among  ourselves, 
that  would  enable  each  and  every  man  to  find,  at  the  instant,  a 
purchaser  for  all  his  powers  of  body,  or  of  mind  ;  and  that,  so  far 
as  the  system  commonly  called  "  free  trade,"  tended  to  prevent 
the  growth  of  that  commerce,  it  was  precisely  the  sort  of  free- 
dom that  we  did  NOT  want.  —  A  disciple  in  the  school  of  Adam 
Smith,  you  could  not  fail  to  agree  with  him  in  his  estimate  of  the 
vast  advantage  to  be  derived  by  the  farmer  from  condensing 
thousands  of  pounds  of  food  and  wool  into  a  piece  of  cloth,  and 
thus  diminishing  the  tax  of  transportation  —  every  step  in  that 
direction  tending  towards  diversifying  employments,  and  thus  ex- 
tending domestic  commerce,  while  greatly  facilitating  intercourse 
with  the  distant  nations  of  the  world. 

The  greater  the  number  of  differences  among  men  —  the 
greater  the  diversity  of  demands  for  their  various  faculties  —  the 
greater,  Mr.  President,  is  the  power  to  maintain  commerce  among 
themselves.  The  greater  the  domestic  commerce,  the  greater  is, 
always,  the  power  to  maintain  commerce  with  distant  people,  and 
the  greater  the  tendency  towards  the  growth  of  wealth  and  power. 
For  proof  of  this,  we  need  only  look  to  France  —  that  country  of 
Europe  whose  policy  has  most  consistently  been  directed  towards 
the  diversification  of  employments,  and  the  extension  of  internal 
commerce.  Seeking,  however,  further  evidence  of  this,  you  may 
look  to  Belgium,  Sweden,  Denmark;  and  Northern  Germany, 
in  all  of  which  you  will  find  a  rapid  extension  of  intercourse 
with  the  world,  as  a  necessary  consequence  of  increasing  power 
for  the  maintenance  of  that  domestic  commerce,  so  well  described 
by  you,  Mr.  President,  as  the  sort  of  "free  trade"  that  we  really 
need  among  ourselves.  Looking,  next,  homeward,  you  at  once 
are  struck  with  the  great  power  of  Massachusetts  to  maintain 
commerce  with  New  York  and  Pennsylvania,  when  compared 
with  the  commercial  relations  of  Virginia  with  Kentucky,  or  of 
Carolina  with  Tennessee. 

Look,  however,  where  you  may,  you  will  nowhere  find  facts 
more  fully  confirmatory  of  the  accuracy  of  your  views,  than  in  the 
commercial  history  of  England,  now  the  great  apostle  of  the  sort 
of  free  trade  that  we  do  not  require.  A  century  since,  she  was 
busily  engaged  in  robbing  her  soil,  and  exporting  it  in  the  form 
of  raw  materials,  to  be  sold,  and  at  the  lowest  prices,  to  the 
manufacturing  communities  of  the  lower  Rhine.  The  more  the 
5 


66  LETTERS   TO   THE 

soil  became  impoverished,  and  the  less  its  yield,  the  lower,  as, 
Mr.  President,  you  have  seen,  became  the  prices ;  and  hence  arose 
the  boast  among  the  German  cities,  that  they  bought  from  the 
Englishman  the  skin  of  the  fox  for  a  groat,  and  then  re-sold  him 
the  tail  for  a  shilling.  —  Ridiculous  as  this  may  now  seem,  it  is 
precisely  what  we  ourselves  are  doing  —  selling  flour  by  the  ton, 
and  then  buying  it  back  again,  in  the  form  of  cloth  and  iron,  by 
the  pound  —  selling  cotton  by  the  bale,  and  then  buying  it  back 
by  the  pennyweight  —  and  exhausting  the  soil  in  the  effort,  in  this 
manner,  to  obtain  the  little  cloth  and  iron,  we  are  able  to  consume. 
Even  then,  however,  a  change  of  the  English  system  was  near  at 
hand.  Efficient  protection —  developing  the  cloth  and  iron  manu- 
factures —  soon  gave  the  English  farmer  a  market  at  home,  and 
thus  created  domestic  commerce,  the  only  solid  foundation  for  a 
great  external  one.  Raw  materials  rose  in  price,  while  machines 
and  cloths  were  cheapened ;  and  thus  was  furnished  the  most 
conclusive  evidence,  that  the  nation  which  would  advance  in  wealth 
and  power,  must  adopt  a  policy  looking  to  the  emancipation  of  the 
farmer  from  the  tax  of  transportation,  and  to  the  approximation 
of  the  prices  of  his  rude  products,  and  those  of  the  finished  com- 
modities required  for  his  use. 

Turning  now  homewards,  Mr.  President,  we  find  abundant  evi- 
dence of  your  perfect  accuracy  in  looking  to  the  extension  of 
domestic  commerce,  as  furnishing  the  only  sure  foundation  for 
an  extended  intercourse  with  foreign  countries,  and  as  being, 
therefore,  the  sort  of  free  trade  that  we  really  need.  —  From  the 
date  of  the  passage  of  the  act  of  1816,  by  which  the  axe  was  laid 
to  the  root  of  our  then-rapidly-growing  manufactures,  the  foreign 
trade  steadily  declined,  until,  in  1821,  the  value  of  our  imports 
was  less  than  half  of  what  it  had  been  six  years  before.  Thence- 
forward, there  was  little  change  until  the  highly  protective  act  of 
1828  came  fairly  into  operation  —  the  average  amount  of  our  im- 
ports, from  1822  to  1830,  having  been  but  80  millions  —  and  the 
variations  having  been  between  96  millions  in  one  year  and  70  in 
another.  Under  that  tariff,  domestic  commerce  grew  with  great 
rapidity  —  enabling  our  people  promptly  to  sell  their  labor,  and 
thus  to  become  large  customers  to  the  people  of  other  lands,  as 
is  shown  by  the  following  figures,  representing  the  value  of  goods 
imported :  — 

1830-31  $103,000,000 

1831-32  101,000,000 

1832-33  108,000,000 

1833-34 126,000,000 

Here,  Mr.  President,  is  a  steady  and  regular  growth  —  the  last 
of  these  years  being,  by  far  the  highest,  and  exceeding,  by  more 
than  50  per  cent.,  the  average  of  the  eight  years  from  1822  to 
1830.  In  this  period,  not  only  did  we  contract  no  foreign  debt, 
but  we  paid  off  the  whole  of  that  which  previously  had  existed  — 
Ihe  legacy  of  the  war  of  independence. 


PRESIDENT   OF   THE   UNITED    STATES.  67 

The  Compromise  tariff  began  now  to  exert  its  influence  on  the 
societary  movement — stopping  the  building  of  mills  and  the  open- 
ing of  mines,  and  thus  lessening  the  power  to  maintain  domestic 
commerce.  How  it  operated  on  that  with  foreign  nations,  is 
shown  in  the  facts,  that  the  imports  of  1837  went  up  to 
$189,000,000,  and  those  of  1838  down  to  $113,000,000  — those 
of  1839  up  to  $162,000,000,  and  those  of  1840  down  to 
$107,000,000  ;  while  those  of  1842  were  less  than  they  had  been 
ten  years  before.  In  this  period,  we  ran  in  debt  to  foreigners,  to 
the  extent  of  hundreds  of  millions,  and  closed  with  a  bankruptcy 
so  universal,  as  to  have  embraced,  individuals,  banks,  towns,  cities, 
States,  and  the  national  treasury  itself. 

That  instability  is  the  essential  characteristic  of  the  system 
called  free  trade  —  that  one  which,  as  you,  Mr.  President,  have 
so  clearly  seen,  we  do  not  want  —  will  be  obvious  on  the  most 
cursory  examination  of  the  facts  presented  by  the  two  -periods  of 
that  system,  through  which  we  have  thus  far  passed.  From  more 
than  $100,000,000,  in  1817,  our  imports  fell,  in  1821,  to 
$62,000,000.  In  1825,  they  rose  to  $96,000,000,  and  then,  two 
years  later,  they  were  but  $79,000,000.  From  1829  to  1834, 
they  grew  steadily  and  regularly,  but,  no  sooner  had  protection 
been  abandoned,  than  instability,  with  its  attendant  speculation, 
re-appeared  —  the  imports  of  1836  having  been  greater  by  45  per 
cent,  than  those  of  1834,  and  those  of  1840  little  more  than  half 
as  great  as  those  of  1836. — Careful  study  of  these  facts,  Mr.  Pre- 
sident, can  scarcely  fail  to  satisfy  you,  that  the  cause  of  all  the 
difficulties  you  have  so  well  described,  is  to  be  found  in  the  action 
of  the  central  government ;  and  that,  it  is  in  that  direction,  and 
not  to  modification  of  the  local  action,  we  must  look  for  remedy. 

Once  again,  in  1842,  protection  was  restored ;  and  once  again, 
do  we  find  a  steady  and  regular  growth  in  the  power  to  maintain 
intercourse  with  the  outer  world,  consequent  upon  the  growth  of 
domestic  commerce,  as  is  shown  in  the  following  figures  :  — 

1843-44  $108,000,000 

1844-45  117,000,000 

1846-46  121,000,000 

1816-47  146,000,000 

Here,  Mr.  President,  we  find  a  constant  increase  of  power  to  go 
to  foreign  markets,  accompanied  by  a  constant  decrease  in  the 
necessity  for  resorting  to  them  —  the  domestic  production  of  cot- 
ton and  woollen  goods  having  doubled  in  this  brief  period,  while 
the  domestic  production  of  iron  had  more  than  trebled. 

Ten  years  having  elapsed  since  the  tariff  of  1846  became 
fairly  operative,  we  have  now  another  opportunity  for  contrasting 
the  operation  of  the  free  trade  that  we  do  not  want,  with  that 
which  we  so  much  require.  Doing  so,  we  find  the  same  instability 
by  which  were  characterised  the  periods  which  preceded  the  act 
of  1824  —  that  of  1828,  and  that  of  1842  —  and  on  a  larger  scale. 


68  LETTERS   TO   THE 

In  1840-50,  out  imports  were  $178,000,000.  In  1854,  they  were 
$304,000,000.  In  1855,  8200,000,000.  In  1857,  $360,000,000— 
and  now,  they  are  about  to  fall  to  $180,000,000,  if  not,  even,  to  a 
figure  greatly  lower. 

That  this  must  be  so,  will  be  obvious  to  those  who  study  the 
history  of  the  past  few  years,  and  contrast  the  hundreds  of  mil- 
lions of  debt  we' have  created  —  making  an  annual  demand  for 
$30,000,000  for  the  payment  of  interest  —  with  the  entire  discredit 
into  which  we  have  now  so  justly  fallen.  That  it  must  be  so,  will 
be  clear  to  those  who  look  to  the  facts,  that,  prior  to  the  opening 
of  the  Crimean  war,  the  price  of  flour  had  fallen  to  a  lower  point 
than  had  ever  before  been  known  —  that  since  that  period,  we 
have  driven  millions  of  men  to  the  creation  of  farms,  that  are  now 
about  to  deluge  us  with  food  —  that  the  number  of  persons  en- 
gaged in  any  department  of  manufacture,  is  less  now,  than  it  was 
five  years  since — that  the  power  to  purchase  food  is  as  steadily 
declining,  as  the  power  to  furnish  it  increases  —  and  that,  with 
favorable  seasons,  its  future  price  must,  certainly,  be  lower  than 
has  ever  yet  been  known.  That  it  must  be  so,  will  be  apparent 
to  those  who  look  to  the  facts,  that  the  cotton  crop,  in  1849,  ex- 
ceeded 2,800,000  bales  —  that,  since  that  time,  the  population  of 
the  cotton-growing  States  has  been  almost  a  third  increased  — 
that  the  new  lands  are  now  becoming  productive  —  that  the  aug- 
mentation of  the  crop  is  likely  to  be  as  great  as  it  was,  after 
the  last  bankruptcy,  in  1841,  when  the  average  was,  suddenly, 
forty  per  cent,  increased  —  that  it  is  likely  soon  to  reach 
4,000,000  bales  — that  the  domestic  market  will  now  be  250,000 
bales  less  than  it  has  been  in  the  past  two  years  —  that  the  foreign 
market  will,  therefore,  be  required  to  absorb  at  least  a  million  of 
extra  bales  —  that  the  farmers  of  Europe  will  find  a  reduction  in 
their  power  to  purchase  clothing,  consequent  upon  the  reduction 
in  the  prices  of  our  food  —  that  the  demand  tends  thus  to  decline 
as  the  supply  tends  to  increase  —  and,  that  all  past  experience 
goes  to  show,  that  after  each  successive  crisis,  the  permanent 
average  of  prices  has  fallen  below  that  which  had  been  fixed  by 
its  predecessor.  —  The  seasons  may  prove  unfavorable,  and  crops 
may  prove  small,  but  should  Providence  favor  the  planter  with 
liberal  returns,  he  is  likely  to  be  more  nearly  ruined,  than  in  any 
period  he  yet  has  seen.  Such  being  the  facts  in  reference  to  the 
future  of  our  great  staples,  it  is  fair,  Mr.  President,  to  assume, 
that  the  quantity  of  foreign  merchandise  we  shall  now  import 
will  scarcely  go  beyond,  even  if  it  equal,  $180,000,000. 

How  the  facts  above  described  have  tended  to  affect  the  cur- 
rency, I  propose  to  show  in  another  letter,  remaining,  meanwhile, 
Yours,  very  respectfully, 

HENKY  C.  CAREY. 
Philadelphia,  January  19th,  1858. 


PRESIDENT   OF   THE   UNITED   STATES.  69 


LETTER   THIRTEENTH. 


THE  single  commodity,  Mr.  President,  that  is  of  universal 
request,  is  MONEY.  Go  where  we  may,  we  meet  persons  seeking 
commodities  required  for  the  satisfaction  of  their  wants  —  yet 
widely  differing  in  their  demands.  One  needs  corn ;  a  second, 
clothing;  a  third,  books,  newspapers,  horses,  or  ships.  Many 
desire  food,  yet  while  one  would  have  fish,  another  rejects  the  fish 
and  seeks  for  meat.  Offer  clothing  to  him  who  sought  for  ships, 
and  he  would  prove  to  have  been  supplied.  Place  before  the 
seeker  after  silks,  the  finest  lot  of  cattle,  and  he  will  not  purchase. 
The  woman  of  fashion  rejects  the  pantaloons  ;  while  the  porter 
regards  her  slipper  as  wholly  worthless.  Of  all  these  people, 
nevertheless,  there  would  not  be  found  a  single  one,  unwilling  to 
give  labor,  attention,  skill,  houses,  bonds,  lands,  horses,  or  what- 
ever else  might  be  within  his  reach,  in  exchange  for  money — pro- 
vided, only,  that  the  quantity  offered  were  deemed  sufficient. 

Were  a  hundred  ships  to  arrive  at  our  several  ports  to-morrow, 
a  single  one  of  which  was  freighted  with  gold,  she  alone  would 
find  a  place  in  the  editorial  columns  of  our  journals — leaving 
wholly  out  of  view  the  remaining  ninety-nine,  freighted  with  silks 
and  teas,  cloth  and  sugar.  The  news,  too,  would  find  a  similar 
place  in  almost  all  the  journals  of  the  Union,  and  for  the  reason, 
that  all  their  readers,  the  bears  excepted,  so  much  rejoice  when 
money  comes  in,  and  so  much  regret  when  it  goes  abroad.  Of 
all  the  materials  of  which  the  earth  is  composed,  there  are  none 
so  universally  acceptable  as  gold  and  silver  —  none,  in  whose 
movements  so  large  a  portion  of  every  community  feels  an 
interest. 

Why,  Mr.  President,  is  this  the  case  ?  Because  of  their  having 
distinctive  qualities  that  bring  them  into  direct  connection  with 
the  distinctive  qualities  of  man  —  facilitating  the  growth  of  asso- 
ciation, and  promoting  the  development  of  human  powers.  They 
are  the  indispensable  instruments  of  society,  or  commerce! 

That  they  are  so,  would  seem  to  be  admitted  by  those  journal- 
ists when  giving  to  their  movements  so  much  publicity  ;  and  yet, 
on  turning  to  another  column,  you  would  probably  find  it  there 
asserted,  that  all  this  anxiety  in  regard  to  money  was  evidence 
of  ignorance  —  man's  condition  being  improved,  by  parting  with 
gold  that  he  can  neither  eat,  drink,  nor  wear,  in  exchange  for 
sugar  that  he  can  eat,  and  cloth  that  he  can  wear.  Such  may  be 
the  case,  says  one  reader,  but,  for  my  part,  I  prefer  to  see  money 
come  in,  because  when  it  does  so,  I  can  borrow  at  six  per  cent.  ; 
whereas,  when  it  is  going  out,  I  have  to  pay  ten,  twelve,  or 
twenty.  This  is  doubtless  true,  says  another,  but  I  prefer  to  see 


70  LETTERS   TO    THE 

money  arrive  —  being  then  able  to  sell  my  hats  and  shoes,  and  to 
pay  the  people  who  make  them.  It  may  be  evidence  of  ignorance, 
says  a  third,  but  I  always  rejoice  when  money  flows  inwards,  for 
then  I  can  always  sell  my  labor ;  whereas,  when  it  flows  outwards, 
I  am  unemployed,  and  my  wife  and  children  suffer  for  want  of 
food  and  clothing.  Men's  natural  instincts  look,  thus,  in  one 
direction,  while  mock  science  points  in  another.  The  first,  Mr. 
President,  should  be  right,  because  they  are  given  of  God.  The 
last  may  be  wrong  —  being  one  among  the  weak  inventions  of 
man.  Which  is  right,  we  may  now  inquire. 

Of  all  the  commodities  in  use  among  men,  there  is  none  the 
control  of  which  gives  to  its  possessor  so  large  an  amount  of 
power,  as  that  of  money.  Sovereigns  in  the  East  heap  up  gold 
as  provision  against  future  accidents  ;  and  finance  ministers  in 
the  West,  rejoice  when  their  accounts  enable  them  to  exhibit  a 
full  supply  of  the  precious  metals.  When  it  is  otherwise,  the 
highest  dignitaries  are  seen  paying  obsequious  court  to  the  Roth- 
schild and  the  Baring,  controllers  of  the  money  market.  So,  too, 
when  railroads  are  to  be  made,  or  steamers  to  be  built.  Farmers 
and  contractors,  land-owners  and  stockholders,  then  go,  cap  in 
hand,  to  the  Croesuses  of  Paris  and  London,  anxious  to  obtain  a 
hearing  —  and  desiring  to  propitiate  the  man  of  power  by  making 
whatsoever  sacrifice  may  seem  to  be  required. 

Of  all  the  questions,  Mr.  President,  that  are  now  before  us, 
there  is  none  that  so  much  occupies  the  public  mind,  as  that  of 
the  establishment  of  the  currency  on  such  a  basis,  as  will  secure 
us  against  future  repetition  of  the  "extravagant  expansions"  and 
"ruinous  contractions, "  that  have, in  each  and  every  case,  attended 
the  departure  of  the  central  government  from  the  course  of  policy 
you  so  much  admire  —  the  course  which  looks  to  giving  us  that 
freedom  of  domestic  intercourse,  from  which  we  have  been  so  much 
debarred.  How  great,  in  your  opinion,  is  the  importance  of  this 
question,  is  clearly  indicated,  as  well  by  the  fulness  with  which 
you  have  treated  it  in  your  Message,  as  by  your  suggestions  in 
reference  to  the  remedies  that,  as  you  seem  to  think,  may  be 
required  for  the  correction  of  the  evils  under  which  we  suffer. 

Prior  to  the  formation  of  the  Constitution,  the  power  to 
create  banks,  and  to  define  the  powers  of  such  institutions, 
rested,  unquestionably,  with  the  States ;  and  as,  when  they  ac- 
cepted that  instrument,  they  certainly  retained  all  the  powers  not 
expressly  parted  with,  not  a  doubt  can  now  exist  of  their  having, 
in  the  time  that  has  since  elapsed,  acted  in  full  accordance  with 
both  its  letter  and  its  spirit.  Nevertheless,  so  great  in  your 
opinion,  Mr.  President,  are  the  evils  now  resulting  from  the  exer- 
cise of  the  power  thus  retained,  that,  "after  long  and  much  reflec- 
tion," you  have  arrived  at  the  conclusion,  that,  "if  experience 
shall  prove  it  to  be  impossible  to  enjoy  the  facilities  which  well- 
regulated  banks  might  afford,  without  at  the  same  time  suffering 


PRESIDENT   OF  THE   UNITED   STATES.  71 

the  calamities  which  the  excesses  of  the  banks  have  hitherto 
inflicted  upon  the  country,  it  would  then  be  far  the  lesser  evil  to 
deprive  them  altogether  of  the  power  to  issue  a  paper  currency, 
and  confine  them  to  the  functions  of  banks  of  deposit  and 
discount."  The  measures  thus  suggested  involving,  of  course, 
the  entire  annihilation  of  the  rights  of  the  States,  in  reference  to 
this  important  question  —  rights,  that,  during  half  a  century  from 
the  peace  of  1183,  had  remained  entirely  unquestioned  —  it  is  no 
matter  for  surprise,  that  it  should  have  required  the  most  serious 
reflection,  before  you  should  have  satisfied  yourself  of  the  necessity 
for  suggesting  a  remedy  so  entirely  opposed  to  the  views  you  pre- 
viously had  entertained  ;  and  so  much  opposed,  too,  to  all  the 
ideas  of  the  founders  of  the  Constitution,  in  reference  to  the  beau- 
tiful system  of  local  self-government  they  had  found  established. 
Where,  however,  Mr.  President,  exists  the  power  to  deprive  the 
States  of  the  exercise  of  rights  with  which  they  have  never  parted  ? 
In  the  central  government  ?  Assuredly  not  —  that  government 
having  no  power  not  expressly  granted  to  it  by  the  Constitution. 
It  is  asserted,  nevertheless,  that  the  Supreme  Court  stands  now 
ready  to  reverse  all  the  action  of  the  past  seventy  years  —  at  this 
late  period  deciding,  that  Washington  and  Adams,  Hamilton  and 
Franklin,  Jefferson  and  Madison,  had  been  altogether  wrong  in 
their  estimate  of  the  powers  of  the  States — that,  according  to  the 
true  intent  and  meaning  of  the  Constitution,  the  regulation  of  all 
the  banks  of  the  Union  belonged  to  the  central  authorities  —  and 
that,  it  needs  but  the  passage  of  an  act  of  Congress,  for  the 
reduction  of  all  the  banks  of  the  Union  to  a  condition  nearly  akin 
to  that  of  saving-funds,  authorised  to  receive  the  deposits  of  indi- 
viduals, and  to  lend  them  out ;  but  deprived  of  all  power  in  any 
other  manner  to  aid  the  operations  of  the  communities  in  which 
they  are  placed. 

It  is  but  the  first  step,  Mr.  President,  that  is  difficult.  That 
once  taken,  each  successive  one  becomes  more  easy  —  the  course 
of  man,  in  whatever  direction,  whether  towards  barbarism  or 
civilization,  centralization  or  localization,  being  one  of  constant 
acceleration.  The  removal  of  the  deposits,  in  defiance  of  law,  by 
General  Jackson,  was  a  great  step  towards  centralization ;  and 
yet,  it  was  but  trivial,  compared  with  that  you  have  now  sug- 
gested—  leading,  as  it  inevitably  does,  to  the  entire  subjection 
of  the  currency  to  the  central  government.  Look  almost  where 
we  may,  Mr.  President,  throughout  the  European  history  of  the 
middle  ages,  we  see  the  exclusive  control  of  the  indispensable 
instrument  of  society,  to  have  been  regarded  as  furnishing  the 
most  important  of  all  the  machinery  of  taxation.  —  So  was  it, 
with  our  Continental  money  —  the  amount  of  taxes  collected  by 
its  aid,  having  been  immeasurably  greater  than  could  have  been 
collected  as  a  consequence  of  any  direct  appeal  to  the  people. 
So  has  it  been,  too,  throughout  this  century,  with  the  Austrian 


72  LETTERS   TO   THE 

government  —  paper  money  having  been  issued  until  it  had  be- 
come greatly  depreciated,  and  then  having  been  replaced  by  other 
paper  money,  whose  value  was,  as  the  taxpayers  were  assured,  to 
be  maintained.  That,  in  turn,  becoming  depreciated,  it  was  called 
in,  to  be  again  and  again  replaced,  until  nearly  the  whole  original 
amount  had  disappeared.  —  To  relieve  themselves  from  such 
oppression  it  was,  that  the  people  of  European  cities  established 
banks ;  and  it  was  by  means  of  those  institutions,  that  the  con- 
trol of  the  currency  was  finally  wrested  from  the  various  sovereigns, 
and  vested  in  their  subjects'  hands  —  leaving  to  the  government 
no  power,  but  that  of  coinage. 

That,  Mr.  President,  having  been  one  of  the  most  important 
steps  in  the  road  towards  the  improvement  of  man's  condition, 
the  money-shop,  or  bank,  has  obtained,  in  all  communities,  au 
importance  increasing  in  the  direct  ratio  of  their  growth  in  civili- 
zation, and  in  freedom.  Among  ourselves,  alone,  are  they  the 
subjects  of  unceasing  denunciation  and  persecution.  Having  be- 
come "identified  with  the  habits  of  our  people,"  they  cannot,  as 
you  say,  be  "suddenly  abolished";  but  their  further  existence 
can,  as  you  add,  be  tolerated,  only  on  the  condition  of  their 
limiting  themselves  "to  their  appropriate  sphere"  —  abstaining 
from  "  administering  to  the  spirit  of  wild  and  reckless  speculation, 
by  extravagant  loans  and  issues,"  and  thus  rendering  themselves 
of  "  advantage  to  the  public." 

It  is  quite  impossible,  Mr.  President,  to  close  our  eyes  to  the 
fact,  that  all  our  tendencies,  for  the  last  few  years,  have  been 
towards  the  absorption  of  all  power  by  the  central  authorities ; 
but,  great  as  have  been  the  previous  steps  in  that  direction,  the 
one  now  proposed  goes  so  far  beyond  them  all,  as  to  leave  them 
out  of  sight.  Let  the  measures  thus  suggested  be  carried  into 
effect  —  let  the  control  of  the  currency  pass  into  the  hands  of 
Federal  agents — and  all  the  expansions  and  contractions  you 
have  so  well  described,  will  be  far  exceeded.  "Deplorable,"  as 
you  truly  say,  is  "  our  present  financial  condition."  The  cup  of 
misery  will,  however,  then  be  full  —  the  pages  of  history  furnishing 
abundant  evidence,  that  of  all  the  tyrannies  yet  known  to  man, 
that  of  a  centralized  democracy  is  the  most  oppressive. 

That  there  is  great  error  somewhere,  there  is  no  doubt.  Does 
it  result  from  the  existence  of  banks  ?  Scarcely,  as  it  would 
seem  —  their  growth,  throughout  Europe,  having  been  in  the  direct 
ratio  of  the  advance  in  civilization.  That  of  France,  with  its 
numerous  branches,  is  the  creation  of  the  present  century.  Those 
of  Germany  tend  rapidly  to  increase  in  number.  Turkey  makes 
no  banks.  —  Does  it  lie  with  bank  notes  ?  It  would  seem  not — 
Great  Britain,  whose  advance  in  civilization  was  so  rapid,  having 
been,  at  all  times,  the  leader  in  the  use  of  a  paper  circulation. 
The  use  of  such  notes  steadily  increases  in  France  and  Belgium ; 
and  yet,  of  all  the  countries  of  Europe,  there  are  none  that  have 


PRESIDENT  OP  THE   UNITED   STATES.  73 

passed  so  nearly  uninjured,  through  the  present  crisis.  Their  use 
is  greater  in  New  England  than  in  Illinois ;  and  yet,  the  changes 
in  the  value  of  property  have  been  far  greater  in  the  latter,  than 
in  the  former. 

Of  all  the  countries  of  the  world,  claiming  to  rank  among  those 
most  civilized,  the  only  two  whose  governments  are  now  engaged 
in  a  crusade  against  bank  notes,  are  the  United  States  and  Eng- 
land —  the  two,  whose  policy  is  wholly  directed  to  the  extension 
of  foreign  trade ;  the  two,  that  now  control  the  chief  gold  deposits 
of  the  world  ;  the  two,  which  regard  an  increase  in  the  necessity 
for  ships  and  wagons  as  evidence  of  growing  wealth  and  power ; 
the  two,  whose  every  step  is  towards  increase  of  centralization ; 
the  two,  whose  policy  tends  towards  diminution  in  the  prices  of 
raw  materials,  and  the  subjection  of  the  farmer  to  the  trader; 
the  two,  whose  crises  are  most  frequent  and  most  severe ;  and 
the  two,  that  are  now  most  nearly  bankrupt. 

The  phenomena  thus  presented  for  consideration,  are,  certainly, 
evidences  of  declining  civilization.  Such  being  the  case,  further 
progress  in  that  direction  must  tend  towards  barbarism.  What, 
however,  is  the  real  route  towards  civilization  ?  That,  Mr.  Presi- 
dent, is  a  question  that  can  be  answered,  only  after  a  brief  inquiry 
into  the  effects  resulting  from  the  possession  of  money,  and  into 
the  circumstances  which  influence  its  supply,  which  it  is  proposed 
now  to  make.  —  Should  that  result  in  satisfying  you,  that  the 
cause  of  all  our  difficulties  is  to  be  found  in  the  failure  of  the 
central  government  to  carry  into  effect  your  views  in  regard  to 
that  commerce  which  we  really  want,  and  not  in  the  local  action ; 
and  should  you,  thereby,  be  relieved  of  all  necessity  for  departing 
from  the  construction  given  to  the  Constitution  by  your  most 
distinguished  predecessors,  it  will,  I  am  well  assured,  be  cause  of 
unmixed  satisfaction. 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 

Philadelphia,  January  2%d,  1858. 


74  LETTERS   TO   THE 


LETTER  FOURTEENTH. 

"  MONEY  —  being  a  mere  commodity — is  subject  to  the  same 
laws  that  govern  wool  and  cloth,  coal  and  iron.  Why,  then, 
should  our  legislators  trouble  themselves  about  its  movements, 
any  more  than  about  those  of  turnips,  or  potatoes  ?  If  we  need 
it,  and  are  ready  to  pay  for  it,  it  will  come.  If  we  do  not  need 
it,  or  have  nothing  with  which  to  pay  for  it,  it  will  not  come  ; 
and  we  shall,  perhaps,  be  better  off  without  than  with  it."  Such, 
Mr.  President,  is  the  sort  of  argument  that,  year  after  year,  is 
used  by  gentlemen  who  hold  to  the  idea  that  countries  are  to  be 
enriched  by  increasing  trade  with  distant  people,  and  sacrificing 
that  commerce  among  ourselves  which,  as  you  have  so  clearly 
seen,  is  the  sort  of  "  free  trade  "  we  really  need ;  by  financiers 
who  tell  us,  that  gold  being  one  of  our  products,  its  export 
is  as  natural  and  necessary  as  is  that  of  cotton,  and  who  look, 
with  perfect  calmness,  at  an  outward  current  of  the  precious 
metals  greatly  exceeding  the  inward  one ;  by  Secretaries  of  the 
Treasury,  who  close  their  eyes  to  the  clouds  that  are  gathering 
round,  and  then,  when  overtaken  by  the  storm,  gravely  tell  the 
suffering  millions,  that  "it  was  impossible  to  foresee  the  present 
revulsion  in  trade  and  commerce";  and  generally,  by  all  that 
class  of  middlemen,  now  so  rapidly  increasing  among  ourselves, 
which  lives  by  preying  upon  the  useful  portions  of  society,  and 
seeks,  as  far  as  possible,  to  widen  the  distance  between  the  men 
who  labor  to  produce,  and  depend  upon  the  sale  of  their  labor 
and  its  products,  for  the  ability  to  feed  their  wives,  their  children, 
and  themselves. 

Such  persons,  Mr.  President,  have,  as  it  would  seem,  yet  to 
learn,  that,  in  addition  to  the  qualities  common  to  themselves  and 
other  commodities,  the  precious  metals  possess  that  other  most 
important  one,  of  being  the  great  instruments,  provided  by  the 
Creator,  for  facilitating  those  exchanges  of  society  which  consti- 
tute that  commerce  between  man  and  his  fellow  man,  by  the 
growth  of  which  we  are  furnished  with  the  highest  of  all  the 
evidences  of  advancing  civilization.  By  their  help  it  is,  that  the 
farmer,  the  miller,  the  clothier,  and  all  other  members  of 
society,  are  enabled  to  purchase  for  a  single  cent,  a  portion  of 
the  labors  of  thousands,  and  tens  of  thousands,  of  men  employed 
in  making  railroads,  engines,  and  cars,  and  transporting  upon 
them,  annually,  hundreds  of  millions  of  letters ;  or,  for  another 
cent,  their  share  of  the  labor  of  the  hundreds,  if  not  thousands,  of 
men  who  have  contributed  to  the  production  of  a  penny  news- 
paper. The  mass  of  small  coin  is  thus  a  saving  fund  for  labor, 
because  it  facilitates  association  and  combination  —  giving  utility 


PRESIDENT   OF   THE   UNITED   STATES.  75 

to  billions  of  millions  of  minutes  that  would  be  wasted,  did  not  a 
demand  exist  for  them  at  the  moment  the  power  to  labor  had  been 
produced.  Labor  being  the  first  price  given  for  everything  we 
value,  and  being  the  commodity  that  all  can  offer  in  exchange, 
the  progress  of  communities  in  wealth  and  influence,  is  in  the 
direct  ratio  of  the  presence,  or  absence,  of  an  instant  demand  for 
the  forces,  physical  and  mental,  of  each  and  every  man  in  the 
community  —  resulting  from  the  existence  of  a  power  on  the  part 
of  each  and  every  other  man,  to  offer  something  valuable  in 
exchange  for  it.  It  is  the  only  commodity  that  perishes  at  the 
instant  of  production,  and  that,  if  not  then  put  to  use,  is  lost 
forever. 

We  are  all,  Mr.  President,  momently  producing  labor-power, 
and  daily  taking  in  the  fuel  by  whose  consumption  it  is  produced ; 
and  that  fuel  is  wasted,  unless  its  product  be  on  the  instant  use- 
fully employed.  The  most  delicate  fruits,  or  flowers,  may  be  kept 
for  hours  or  days ;  but  the  force  resulting  from  the  consumption 
of  food,  cannot  be  kept,  even  for  a  second.  That  the  instant 
power  of  profitable  consumption  may  be  coincident  with  the  in- 
stant production  of  this  universal  commodity,  there  must  be  inces- 
sant combination,  followed  by  incessant  division  and  subdivision ; 
and  that,  in  turn,  followed  by  as  incessant  recomposition.  This 
is  seen  in  the  case  above  referred  to,  where  miners,  furnace-men, 
machine-makers,  rag-gatherers,  carters,  bleachers,  paper-makers, 
railroad  and  canal  men,  type-makers,  compositors,  pressmen,  au- 
thors, editors,  publishers,  newsboys,  and  hosts  of  others,  combine 
their  efforts  for  the  production  in  market  of  a  heap  of  newspapers 
that  has,  at  the  instant  of  production,  to  be  divided  off  into  por- 
tions suited  to  the  wants  of  hundreds  of  thousands  of  consumers. 
Each  of  these  latter  pays  a  single  cent — then  perhaps  subdividing 
it  among  half  a  dozen  others,  so  that  the  cost  is  perhaps  no  more 
than  a  cent  per  week ;  and  yet,  each  obtains  his  share  of  the  labors 
of  all  the  persons  by  whom  it  had  been  produced. 

Of  all  the  phenomena  of  society,  this  process  of  division,  sub- 
division, composition,  and  recomposition,  is  the  most  remarkable ; 
and  yet,  Mr.  President  —  being  a  thing  of  such  common  occur- 
rence —  it  scarcely  attracts  the  slightest  notice.  Were  the  news- 
paper above  referred  to,  partitioned  off  into  squares,  each  repre- 
senting its  portion  of  the  labor  of  one  of  the  persons  who  had 
contributed  to  the  work,  it  would  be  found  to  be  resolved  into  six, 
eight,  or  perhaps  even  ten  thousand  pieces,  of  various  sizes,  small 
and  great  —  the  former  representing  the  men  who  had  mined  and 
smelted  the  ores  of  which  the  types  and  presses  had  been  com- 
posed, and  the  latter  the  men  and  boys  by  whom  the  distribution 
had  been  made.  Numerous  as  are  these  little  scraps  of  human 
effort,  they  are,  nevertheless,  all  combined  in  every  sheet,  and 
every  member  of  the  community  may  —  for  the  trivial  sum  of  fifty 
cents  per  annum  —  enjoy  the  advantage  of  the  information  therein 


76  LETTERS  TO   THE 

contained  ;  and  as  fully  as  he  could  do,  had  it  been  collected  for 
himself  alone. 

Improvements  in  the  modes  of  transportation  are  advantageous 
to  man,  but  the  service  thereby  rendered,  when  compared  with 
the  cost,  is  very  small.  A  ship  worth  $50,000  cannot  effect 
exchanges  between  men  at  opposite  sides  of  the  Atlantic,  to  an 
extent  exceeding  five  or  six  thousand  tons  per  annum  ;  whereas, 
a  furnace  of  similar  cost  will  effect  the  transmutation  of  thirty 
thousand  tons'  weight  of  coal,  ore,  limestone,  food,  and  clothing, 
into  iron.  Compared  with  either  of  these,  however,  the  commerce 
effected  by  the  help  of  $50,000  worth  of  little  white  pieces,  repre- 
senting labor  to  the  extent  of  three  or  five  cents  —  labor  which, 
by  their  help,  is  gathered  up  into  a  heap,  and  then  divided  and 
subdivided  day  after  day  throughout  the  year  —  and  it  will  be 
found  that  the  service  rendered  to  society,  in  economizing  force, 
by  each  dollar's  worth  of  money,  is  greater  than  is  rendered  by 
hundreds,  if  not  thousands,  employed  in  manufactures,  or  tens  of 
thousands  in  ships  or  railroads  ;  and  yet  there  are  able  writers, 
Mr.  President,  who  tell  us,  that  money  is  so  much  "  dead 
capital," — being  "an  important  portion  of  the  capital  of  a 
country  that  produces  nothing  for  the  country." 

"  Money,  as  money,"  says  an  eminent  economist,  "satisfies  no 
want,  answers  no  purpose.  *  *  The  difference  between  a 
country  with  money,  and  a  country  altogether  without  it,  would," 
as  he  thinks,  "  be  only  one  of  convenience,  like  grinding  by  water 
instead  of  by  hand."  A  ship,  as  a  ship  —  a  road,  as  a  road  —  a 
cotton-mill,  as  a  cotton-mill  —  in  like  manner,  however,  "satisfies 
no  want,  answers  no  purpose."  They  can  be  neither  eaten,  drunk, 
nor  worn.  All,  however,  are  instruments  for  facilitating  the  work 
of  association,  and  the  growth  of  man  in  wealth  and  power  is  in 
the  direct  ratio  of  the  facility  of  combination  with  his  fellow-men. 
To  what  extent  they  do  so,  when  compared  with  money,  we  may 
now  inquire.  To  that  end,  let  us  suppose,  Mr.  President,  that 
by  some  sudden  convulsion  of  nature  all  the  ships  of  the  world 
were  at  once  annihilated,  and  remark  the  effect  produced.  The 
ship-owners  would  lose  heavily  ;  the  sailors  and  the  porters  would 
have  less  employment ;  and  the  price  of  wheat  would  temporarily 
fall ;  while  that  of  cloth  would,  for  the  moment,  rise.  At  the 
close  of  a  single  year,  by  far  the  larger  portion  of  the  operations 
of  society  would  be  found  moving  precisely  as  they  had  done  be- 
fore—  commerce  at  home  having  taken  the  place  of  that  abroad. 
Cotton  and  tropical  fruits  would  be  less  easily  obtained  in  Northern 
climes,  and  ice  would  be  more  scarce  in  Southern  ones ;  but,  in 
regard  to  the  chief  exchanges  of  a  society  like  our  own,  there 
would  be  no  suspension,  even  for  a  single  instant.  So  far,  indeed, 
would  it  be  to  the  contrary,  that,  in  many  countries,  commerce 
would  be  far  more  active  than  it  had  been  before  —  the  loss  of 
ships  producing  a  demand  for  the  opening  of  mines,  for  the  con- 


PRESIDENT   OF   THE   UNITED   STATES.  77 

struction  of  furnaces  and  engines,  and  for  the  building  of  mills, 
that  would  make  a  market  for  labor,  mental  and  physical,  such  as 
had  never  before  been  known. 

Let  us  next  suppose  that  the  ships  had  been  spared,  and  that 
all  the  gold  and  silver,  coined  and  not  coined,  mined  and  not 
mined,  had  been  annihilated,  and  study  the  effect  that  would  be 
produced.  The  reader  of  newspapers  —  finding  himself  unable 
to  pay  for  them  in  beef  or  butter,  cloth  or  iron  —  would  be  com- 
pelled to  dispense  with  his  usual  supply  of  intelligence,  and  the 
journal  would  be  no  longer  printed.  ,  Omnibuses  would  cease  to 
run,  for  want  of  sixpences ;  and  places  of  amusement  would  be 
closed,  for  want  of  shillings.  Commerce  among  men  would  be  at 
an  end,  except  so  far  as  it  might  be  found  possible  to  effect  direct 
exchanges  —  food  being  given  for  labor,  or  wool  for  cloth.  Such 
exchanges  could,  however,  be  few  in  number,  and  men,  women, 
and  children,  would  perish  by  millions,  because  of  inability  to 
obtain  food  and  clothing  in  exchange  for  service.  Cities  whose 
population  now  counts  by  hundreds  of  thousands  would,  before 
the  close  of  a  single  year,  exhibit  hundreds  of  blocks  of  unoccupied 
buildings,  and  the  grass  would  grow  in  their  streets.  A  substi- 
tute might,  it  is  true,  be  found  —  men  returning  to  the  usages  of 
those  primitive  times  when  wheat  or  iron,  tobacco  or  copper,  con- 
stituted the  medium  of  exchange ;  but  under  such  circumstances, 
society,  as  at  present  constituted,  could  have  no  existence.  A 
pound  of  iron  would  be  required  to  pay  for  a  Tribune  or  a  Ledger, 
and  hundreds  of  tons  of  any  of  the  commodities  above  referred  to, 
would  be  needed  for  the  purchase  of  the  weekly  emissions  of  either. 
Tons  of  them  would  be  needed  to  pay  for  the  food  consumed  in 
a  single  eating-house,  or  the  amusement  furnished  in  a  single  the- 
atre ;  and  how  the  wheat,  the  iron,  the  corn,  or  the  copper,  could  be 
fairly  divided  among  the  people  who  had  contributed  to  the  pro- 
duction of  the  journal,  the  food,  or  the  amusement,  would  be  a 
problem  entirely  incapable  of  solution. 

The  precious  metals,  Mr.  President,  are  to  the  social  body  what 
atmospheric  air  is  to  the  physical  one.  Both  supplying  the  ma- 
chinery of  circulation,  the  resolution  of  the  physical  body  into  its 
elements  when  deprived  of  the  one,  is  not  more  certain  than  is 
that  of  the  social  body  when  deprived  of  the  other.  In  both 
these  bodies,  the  amount  of  force  is  dependent  upon  the  rapidity 
of  circulation.  That  it  may  be  rapid,  there  must  be  a  full  supply 
of  the  machinery  by  means  of  which  it  is  to  be  effected ;  and  yet 
there  are  distinguished  writers  who  mourn  over  the  cost  of  main- 
taining the  currency,  as  if  it  were  altogether  lost,  while  expatiating 
on  the  advantages  of  canals  and  railroads  —  not  perceiving,  appa- 
rently, that  the  money  that  can  be  carried  in  a  bag,  and  that 
scarcely  loses  in  weight  with  a  service  of  half  a  dozen  years,  effects 
more  exchanges  than  could  be  effected  by  a  fleet  of  ships,  many 
of  which  would,  at  the  close  of  such  a  period  of  service,  be  rotting 


78  LETTERS   TO   THE 

on  the  shores  on  which  they  had  been  stranded,  while  the  remain- 
der would  already  have  lost  half  of  their  original  value. 

Of  all  the  labor-saving  machinery  in  use,  there  is  none  that  so 
much  economizes  human  power,  and  so  much  facilitates  combina- 
tion, as  that  known  by  the  name  of  money.  Wealth,  or  the  power 
of  man  to  command  the  services  of  nature,  grows  with  every  in- 
crease in  the  facility  of  combination  —  this  latter  growing  with 
the  growth  of  the  ability  to  command  the  aid  of  the  precious 
metals.  Wealth,  then,  should  increase  most  rapidly  where  that 
ability  is  most  complete. 

Nevertheless,  Mr.  President,  a  study  of  our  Treasury  Reports 
of  the  last  few  y.ears.,  would  lead  to  the  conclusion,  that  of  all  the 
machinery  used  by  man,  the  ship  was  the  most  important,  and 
the  precious  metals  those  that  demanded  least  attention.  Year 
after  year,  we  are  told  of  the  wonderful  growth  of  our  tonnage  ; 
and  that,  too,  by  gentlemen  who  seem  never  to  advert  to  the  fact, 
that  a  single  ship  would  carry  more  tons  of  food  and  wool,  in  the 
shape  of  cloth,  than  it  can  carry  of  hundred-weights,  in  their  original 
form.  The  great  object  to  be  accomplished  being,  that  of  in- 
creasing the  quantity  of  shipping,  it  seems  almost  surprising  that 
we  should  not,  as  yet,  have  had  a  proposition  to  require  the  cotton 
to  be  exported  in  the  seed,  and  the  corn  in  the  husk,  as  a  means 
of  increasing  the  bulk  of  the  things  to  be  transported,  and  thus 
augmenting  the  demand  for  ships.  —  Our  whole  policy  looking  to 
the  export  of  our  products  in  their  rudest  states  —  and  thus  main- 
taining, at  its  highest,  the  tax  of  transportation  —  and  that  being 
the  road  towards  barbarism  —  it  affords  no  cause  for  surprise, 
that  our  people  are  so  frequently  compelled  to  resort  to  the  use 
of  worthless  rags,  as  furnishing  the  only  means  of  circulation  that 
are  within  their  reach.  —  What  are  the  circumstances  which  tend 
to  increase  the  supply  of  money,  and  how  we  may  be  enabled  to 
carry  into  effect  your  idea  of  a  real  specie  circulation,  I  propose 
to  show  in  another  letter,  remaining  meanwhile,  Mr.  President, 
Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  January  25th,  1858. 


PKESIDENT   OF  THE   UNITED   STATES.  79 


LETTER   FIFTEENTH. 


more  than  twenty  years,  Mr.  President,  the  Federal  govern- 
ment has  been  engaged  in  an  almost  unceasing  effort  to  secure  to 
itself  the  control  of  that  great  instrument  of  association  known  as 
money  —  the  professed  object  of  all  its  labors  in  that  direction, 
having  been,  the  establishment  of  what  has  been  termed  '  '  a  hard 
money  currency,"  to  the  entire  exclusion  of  the  paper  circulation. 
The  more  it  has  labored,  however,  the  less  has  been  the  stability 
of  the  currency  —  the  periods  distinguished  by  its  most  earnest 
efforts,  having  been  those  in  which  we  have  been  most  compelled 
to  dispense  with  the  use  of  the  precious  metals.  But  recently, 
money,  as  we  were  told,  abounded  —  the  channels  of  circulation 
having  been,  everywhere,  filled  with  gold.  Now,  money  of  every 
kind,  has  almost  altogether  disappeared.  "There  is  scarcely," 
says  a  recent  traveller,  "  an  Eastern  bank-note  to  be  found  west 
of  Cleveland,  and  any  few  dollars  that  may  straggle  this  way 
are  eagerly  snapped  up  and  sent  East  as  a  remittance.  Gold  is 
hidden,  where  it  still  lingers  ;  but  very  much  not  only  of  this,  but 
of  silver  change,  has  been  gathered  up  and  sent  East.  Nebraska 
bank-notes,  generally  of  dubious  solvency,  and  uniformly  convert- 
ible into  specie,  or  Eastern  paper,  only  at  a  ruinous  discount,  cor- 
poration shinplasters,  and  even  individual  shinplasters  —  none  of 
them  regarded  as  of  any  value  far  outside  of  the  shadow  of  the 
tall  '  Banks  '  whence  they  are  issued  —  are  the  accepted  substitutes 
for  money  in  most  localities  upon,  and  west  of,  the  Mississippi. 
One  of  the  Hutchinson  brothers  —  who  are  now  here,  singing  their 
way  Eastward,  from  their  new  home  in  Minnesota  —  informed  me, 
that  he  has  been  singing  along  four  hundred  miles,  through  Min- 
nesota and  Iowa  —  taking  grain  for  music,  wherever  cash  was  un- 
attainable, and  has  done  very  well  by  it.  In  one  instance,  a 
farmer  drove  up  with  eight  bushels  of  corn  in  his  sleigh,  and  his 
wife  and  six  children  seated  thereon,  saying,  '  We  have  no  money, 
but  we  all  want  to  hear  you,  and  corn  is  the  best  we  can  give  you.  ' 
He  accepted  the  corn  very  gladly,  gave  eight  twenty-five-cent 
tickets  in  exchange  for  it,  and  sung  it  out.  " 

Similar  to  this,  Mr.  President,  was  the  state  of  things  at  the 
close  of  the  first  trial  of  that  "  free  trade  "  system,  which,  as  you 
have  so  clearly  seen,  we  do  not,  at  present,  require.  So  was  it, 
too,  in  1840-41,  at  the  close  of  the  second  experiment  —  the  only 
difference  between  it  and  its  predecessor,  having  been,  that  the 
second  crisis  was  far  more  fearful  than  the  first.  So  is  it,  now, 
when  we  are  fast  approaching  the  close  of  the  third  experiment  — 


80  LETTERS   TO   THE 

each  and  every  trial  of  the  favorite  policy  of  the  central  govern- 
ment, thus  ending  in  the  total  disappearance  of  that  "  metallic 
basis  "  which  it  has  so  much  desired  to  increase. 

Why  is  this  so  ?  Because,  Mr.  President,  your  predecessors 
seem  ever  to  have  reflected,  that,  to  be  enabled  to  use  any  com- 
modity, or  thing,  we  must  first  enable  ourselves  to  get  it ;  and 
that,  a  regular  influx  of  the  precious  metals  is  quite  as  necessary 
to  the  maintenance  of  a  hard  money  circulation,  as  is  an  influx 
of  hides  and  cotton,  to  enable  us  to  wear  shoes  and  shirts.  While 
asserting  that  money  is  a  mere  commodity,  they  do  not  admit  that 
it  is  subject  to  the  same  laws  which  govern  other  commodities. 
Had  our  policy  tended  to  produce  so  great  an  export  of  cotton 
as  to  compel  our  people  to  go  in  rags,  no  one  would  have  thought 
of  charging  the  dealers  in  cotton  with  crime  ;  and  yet,  while  pur- 
suing a  policy  that  has,  whenever  tried,  resulted  in  the  disappear- 
ance of  the  precious  metals,  the  fact  of  inability  to  produce  them 
when  demanded,  has  always  been  regarded  as  evidence  of  crimi- 
nality in  the  banks  —  warranting  new  additions  to  the  pains  and 
penalties  provided  by  existing  laws.  Year  after  year,  since  the 
central  government  undertook  the  regulation  of  the  currency,  have 
they  been  increased ;  and  yet,  despite  the  penalties,  suspensions 
have  occurred.  They  must  continue  to  occur,  until  the  central 
government  shall  come  to  appreciate  the  value  of  that  very  homely 
proverb,  which  teaches,  that  a  boy  cannot  eat  a  cake  and  yet 
have  it  —  thence  learning,  that  a  community  cannot,  more  than 
an  individual,  pursue  a  course  tending  to  promote  the  expulsion 
of  the  precious  metals,  and  yet  enjoy  all  the  advantages  attendant 
upon  the  maintenance  of  a  specie  circulation. 

All  commodities,  Mr.  President,  go  from  those  places  at  which 
their  utility  is  small,  to  those  at  which  it  is  great.  Therefore  it  is, 
that  cotton,  wool,  and  other  raw  materials,  tend  towards  those 
places  at  which  employments  are  most  diversified  —  it  being  there 
that  the  products  of  the  farm  command  the  largest  quantity  of 
money.  Gold  and  silver  follow  in  the  train  of  raw  materials ;  and 
for  the  reason,  tha.t  where  the  farmer  and  the  artisan  are  most 
enabled  to  combine,  finished  commodities  are  always  cheapest. 
When  Germany  exported  corn  and  wool,  they  were  cheap,  and 
she  was  required  to  export  gold,  to  aid  in  paying  for  the  cloth  and 
paper  she  imported  —  the  latter  being  very  dear.  Now  she  im- 
ports both  wool  and  rags ;  her  farmers  obtain  high  prices  for  their 
products,  and  are  enriched ;  and  the  gold  comes  to  her,  because 
cloth  and  paper  are  so  cheap,  that  she  sends  them  to  the  most  dis- 
tant quarters  of  the  world.  So  is  it  with  France,  Belgium,  Swe- 
den, and  Denmark  —  all  of  which  are  large  importers  of  raw  ma- 
terials, and  of  gold.  In  all  those  countries,  raw  materials  rise  in 
price ;  and  the  greater  the  tendency  to  rise,  the  more  rapidly  must 
the  current  of  the  precious  metals  set  in  that  direction.  The 


PRESIDENT   OF   THE   UNITED    STATES.  81 

country  that  desires  to  increase  its  supplies  of  gold,  and  thus 
lower  the  price  of  money,  is,  therefore,  required  to  pursue  the 
course  of  policy  tending  most  to  raise  the  prices  of  raw  material, 
and  lower  those  of  manufactures.  This,  however,  is  directly  the 
opposite  of  the  policy  advocated  by  the  British  school,  which 
seeks,  in  the  cheapening  of  all  the  raw  material  of  manufactures, 
the  means  of  advancing  civilization. 

The  proposition,  Mr.  President,  above  submitted  for  your  con- 
sideration, is  a  very  simple  one,  and  yet,  it  is  by  its  aid,  if  at  all, 
that  we  shall  arrive  at  a  correct  understanding  of  the  cause  of  the 
difficulties  under  which  we  labor.  The  precious  metals  go  from 
those  countries  in  which  employments  are  least  diversified  — from 
those,  in  which  agriculture  is  least  a  science — from  those,  in  which 
the  yield  of  the  land  is  least — from  those,  in  which  the  land  is 
becoming  more  and  more  exhausted  — from  those,  in  which  the 
prices  of  the  rude  products  of  the 'earth  are  the  lowest — from 
those,  that  are  becoming  more  and  more  dependent  upon  trade  — 
from  those,  in  which  domestic  commerce  declines  — from  those, 
in  which  men  are  becoming  less  free — from  all  those,  therefore, 
which  decline  in  civilization.  They  go  to  those  countries  in  which 
employments  are  becoming  more  diversified  —  to  those,  in  which 
agriculture  is  becoming  more  and  more  a  science  —  to  those,  in 
which  the  yield  of  the  land  is  largest — to  those,  in  which  the 
powers  of  the  land  increase  —  to  those,  in  which  the  farmer's  pro- 
ducts command  the  highest  prices  —  to  those,  which  are  becoming 
less  dependent  upon  foreign  trade  —  to  those,  in  which  there  is  a 
steady  growth  of  the  domestic  commerce  —  to  those,  in  which  men 
are  becoming  less  and  less  enslaved  —  to  all  those,  therefore,  in 
which,  with  each  successive  year,  we  are  more  and  more  presented 
with  those  phenomena  which  indicate  advance  in  civilization. 

Of  the  machinery  in  use  by  man,  it  is  the  most  serviceable 
that  is  last  obtained — the  cart  following  the  camel  and  the  mule — 
the  wagon  following  the  cart  —  and  the  railroad  car,  with  its  lo- 
comotive, following  the  wagon.  Of  all  the  instruments  given  by 
the  Creator  for  man's  use,  money  is  the  one  which  performs  the 
largest  amount  of  service,  in  proportion  to  its  cost ;  and  therefore 
it  is,  that  it  is  always  the  last  to  be  obtained.  Countries  whose 
people  are  limited  to  the  single  pursuit  of  scratching  the  earth, 
can  neither  afford  to  buy  nor  keep  it.  Therefore  it  is,  that  the 
precious  metals  go  from  Portugal  and  Turkey,  Brazil  and  Chili, 
California  and  Australia,  in  both  of  which  latter,  the  price  of 
money,  as  indicated  by  the  rate  of  interest,  is  higher  than  in 
almost  any  other  portion  of  the  world.  —  Countries  in  which  the 
pursuits  of  man  are  diversified  —  those,  therefore,  in  which  the 
prices  of  agricultural  products  tend  to  rise  —  can  afford  to  buy 
and  keep  them ;  and  that  such  diversification  is  essential  to  the 
existence  of  the  power  so  to  do,  is  proved  by  every  fact  in  the 


82  LETTERS   TO   THE 

history  of  English  commerce  in  the  last  century,  and  in  those  of 
all  the  advancing  countries  of  Europe  in  the  present  one.  —  That 
power  grows  with  the  growth  of  domestic  commerce,  the  only 
sure  foundation,  as  you,  Mr.  President,  have  so  clearly  seen,  of  a 
great  foreign  one.  In  its  existence,  therefore,  may  be  found  the 
most  conclusive  proof  of  advancing  civilization.  Which  have 
been  the  periods  at  which  it  has  existed  among  ourselves,  and  how 
it  has  affected  the  supplies  of  gold,  we  may  now  inquire. 

What  was  the  commerce  in  the  precious  metals  in  the  thirty  years 
preceding  the  discovery  of  California,  is  shown  by  the  following 
figures  :  — 

Excess  exports.     Excess  imports. 

1821-1825 $12,,500,000      

1826-1829 $4,000,000 

1830-1834 20,000,000 

1835-1838  (a  period  of  extensive  foreign  loans)      34,000,000 

1839-1842 9,000,000       

1843-1847  (foreign  debt  largely  reduced) 39,000,000 

1848-1850 14,000,000      

IntheclosingyearsofthefreetradesystemoflSlf,  Mr.  President, 
the  average  excess  of  specie  export  was  about  $2,500,000  a  year. 
Adding  to  this  a  similar  amount,  only,  for  the  annual  consump- 
tion, we  obtain  an  absolute  diminution  of  five-and-twenty  millions 
—  the  population  having,  meantime,  increased  about  ten  per  cent. 
Under  such  circumstances,  it  is  no  matter  of  surprise  that  those 
years  are  conspicuous  among  the  most  calamitous  ones  in  all  our 
history.    At  Pittsburg,  flour  then  sold  at  $1.25  per  barrel ;  wheat, 
throughout  Ohio,  would  command  but  20  cents  a  bushel ;  while 
a  ton  of  bar  iron  required  a  little  short  of  eighty  barrels  of  flour 
to  pay  for  it.     Such  was  the  state  of  affairs  that  produced  the 
tariff  of  1824  —  a  very  imperfect  measure  of  protection,  but  one 
that,  imperfect  as  it  was,  changed  the  course  of  the  current,  and 
caused  a  net  import,  in  the  four  years  that  followed,  of  $4,000,000 
of  the  precious  metals.      In  1828,  there  was  enacted  the  first 
tariff  tending  directly  to  the  promotion  of  association  throughout 
the  country  ;  and  its  effects  exhibit  themselves  in  an  excess  import 
of  the  precious  metals  —  averaging  $4, 000, 000  a  year  —  notwith- 
standing the  discharge,  in  that  period,  of  the  whole  of  the  national 
debt  that  had  been  held  in  Europe,  amounting  to  many  millions. 
Putting  together  the  discharge  of  debt  and  the  import  of  coin,  the 
balance  of  trade  in  that  period  must  have  been  in  our  favour  to 
the   extent   of  nearly   $50,000,000 ;    or   an    average   of    about 
$10,000,000  a  year.     As  a  consequence,  prosperity  existed  to  an 
extent  never  before  known  —  the  power  to  purchase  foreign  com- 
modities having  grown  with  such  rapidity  as  to  render  it  neces- 
sary greatly  to  enlarge  the  free  list ;  and  then  it  was,  that  coffee, 
tea,  and  many  other  raw  commodities,  were  emancipated  from 


PRESIDENT   OF  THE    UNITED   STATES.  83 

the  payment  of  any  impost.  Thus  did  efficient  protection  lead  to 
a  freedom  of  commerce,  abroad  and  at  home,  such  as  had  never 
before  existed. 

The  first  few  years  of  the  compromise  tariff  of  1833,  profited 
largely  by  the  prosperity  caused  by  the  act  of  1828,  and  the  re- 
ductions under  it,  were  then  so  small,  that  its  operation  was  but 
slightly  felt.  In  those  years,  too,  there  was  contracted  an  enor- 
mous foreign  debt  —  stopping  the  export  of  specie,  and  producing 
an  excess  import  averaging  more  than  $8,000,000  a  year.  Pros- 
perity seemed  to  exist,  but  it  was  of  the  same  description  that  has 
marked  the  last  few  years,  during  which  the  value  of  all  property 
has  depended  entirely  upon  the  power  to  contract  debts  abroad — 
thus  placing  the  nation  more  completely  under  the  control  of  its 
distant  creditors. 

In  the  succeeding  years,  the  compromise  became  more  fully 
operative.*  Furnaces  and  factories  were  closed,  with  constantly 
increasing  necessity  for  looking  abroad  for  the  performance  of  all 
exchanges,  and  corresponding  necessity  for  remitting  money  to 
pay  the  balance  due  on  the  purchases  of  previous  years.  Never- 
theless, the  annual  specie  export  averaged  little  more  than 
$2,000,000;  but  if  to  this  be  added,  a  consumption  of  only 
$3,000,000  a  year,  we  have  a  reduction  of  $20,000,000 ;  the  con- 
sequences of  which  were  seen,  in  an  almost  total  suspension  of 
domestic  commerce.  The  whole  country  was  in  a  state  of  ruin. 
Laborers  were  everywhere  out  of  employment,  and  being  still  con- 
sumers, while  producing  nothing,  the  power  of  accumulation  ceased, 
almost,  to  exist.  Debtors  being  every  where  at  the  mercy  of  creditors, 
sales  of  real  estate  were  chiefly  accomplished  by  help  of  the  sheriff, 
whose  perquisites  were  then  larger  than  they  had  been  at  any  time 
from  the  date  of  the  Constitution. 

The  change  in  the  value  of  labor,  consequent  upon  the  stoppage 
of  the  circulation  that  followed  this  trivial  export  of  the  precious 
metals,  cannot,  Mr.  President,  be  placed  at  less  than  $500,000,000 
a  year.  Wages  were  low,  even  where  employment  could  be  ob- 
tained ;  but  a  large  portion  of  the  labor-power  of  the  country  was 
totally  wasted,  and  the  demand  for  mental  power  diminished  even 
more  rapidly  than  that  for  physical  exertion.  In  the  prices  of 
land,  houses,  machinery  of  all  kinds,  and  other  similar  property, 
the  reduction  counted  by  thousands  of  millions  of  dollars ;  and 
yet,  the  difference  between  the  two  periods  ending  in  1833  and 
1842,  in  regard  to  the  monetary  movement,  was  only  that  between 
an  excess  import  of  $5,000,000,  and  an  excess  export  of 
$2,500,000,  or  a  total  of  $T, 500,000  a  year.  No  one  who 

*  One-tenth  of  the  excess  over  20  per  cent,  was  reduced  in  December, 
1833;  another  tenth  in  1835;  a  third  in  1837;  a  fourth  in  1839;  the  re- 
maining excess  of  duties  being  then  equally  divided  into  two  parts,  to  be 
reduced  in  1841  and  1842. 


84  LETTERS   TO    THE 

studies  these  facts,  can  fail  to  be  struck  with  the  wonderful  power 
over  the  fortunes  and  conditions  of  men,  exerted  by  the  metals 
provided  by  the  Creator,  for  furthering  the  work  of  association 
among  mankind.  With  the  small  excess  of  import  in  the  first 
period,  there  was  a  steady  tendency  towards  equality  of  condition 
among  the  poor  and  the  rich,  the  debtor  and  the  creditor ;  where- 
as, with  the  slight  excess  of  export  in  the  second  one,  there  was  a 
daily  increasing  tendency  towards  inequality  —  the  poor  laborer 
and  the  debtor,  passing  steadily  more  under  the  control  of  the  rich 
employer,  and  the  wealthy  creditor. 

Of  all  the  machinery  furnished  for  the  use  of  man,  there  is  none, 
Mr.  President,  so  equalizing  in  its  tendency  as  that  known  by  the 
name  of  money ;  and  yet  economists  would  have  the  world  believe 
that  the  agreeable  feeling  which,  everywhere,  attends  a  knowledge 
that  it  is  flowing  in,  is  evidence  of  ignorance  —  any  reference  to 
the  question  of  the  favorable  or  unfavorable  balance  of  trade,  be- 
ing beneath  the  dignity  of  men  who  fancy  they  are  following  in 
the  footsteps  of  Hume  and  Smith.  It  would,  however,  be  as 
difficult  to  find  a  single  prosperous  community  that  is  not,  from 
year  to  year,  making  itself  a  better  customer  to  the  gold-producing 
countries,  as  it  would  be  to  find  one  that  is  not  becoming  a  better 
customer  to  those  which  produce  silk,  or  cotton.  To  be  an  im- 
proving customer,  there  must  be  in  its  favor  a  steadily  increasing 
balance  of  trade,  to  be  settled  by  payment  in  the  commodity  for 
whose  production  the  country  is  fitted,  whether  that  be  cloth,  or 
tobacco,  silver  or  gold. 

The  condition  of  the  nation  at  the  date  of  the  passage  of  the 
act  of  1842,  was,  Mr.  President,  humiliating  in  the  extreme.  The 
Treasury  —  unable  to  obtain  at  home  the  means  required  for  ad- 
ministering the  government,  even  on  the  most  economical  scale — 
had  failed  in  all  its  efforts  to  negotiate  a  loan  at  six  per  cent., 
even  in  the  same  foreign  markets  in  which  it  had  but  recently  paid 
off,  at  par,  a  debt  bearing  an  interest  of  only  three  per  cent. 
Many  of  the  States,  and  some  even  of  the  oldest  of  them,  had 
been  forced  to  suspend  the  payment  of  interest  on  their  debts. 
The  banks,  to  a  great  extent,  being  in  a  state  of  suspension,  those 
which  professed  to  redeem  their  notes,  found  their  business  greatly 
restricted  by  the  increasing  demand  for  coin  to  go  abroad.  The 
use  of  either  gold  or  silver  as  currency  had  almost  altogether 
ceased.  The  Federal  government,  but  recently  so  rich,  was  driven 
to  the  use  of  inconvertible  paper  money,  in  all  its  transactions 
with  the  people.  Of  the  merchants,  a  large  portion  had  become 
bankrupt.  Factories  and  furnaces  being  closed,  hundreds  of 
thousands  of  persons  were  totally  unemployed.  Commerce  had 
scarcely  an  existence  —  those  who  could  not  sell  their  own  labor, 
being  unable  to  purchase  that  of  others. 

Nevertheless,  deep  as  was  the  abyss  into  which  the  nation  had 


PEESIDENT  OF  THE   UNITED   STATES.  85 

been  plunged,  so  magical  was  the  effect  of  the  adoption  of  a  sys- 
tem tending  to  the  creation  of  a  favorable  balance  of  trade,  that 
scarcely  had  the  act  of  August,  1842,  become  a  law,  when  the 
government  found  that  it  could  have  all  its  wants  supplied  at 
home.  Mills,  factories,  and  furnaces,  long  closed,  were  again 
opened ;  labor  came  again  into  demand ;  and,  before  the  close 
of  its  third  year,  prosperity  almost  universal  reigned.  States 
recommenced  the  payment  of  interest  on  their  debts.  Railroads 
and  canals  again  paid  dividends.  Real  estate  had  doubled  in 
value,  and  mortgages  had  been  everywhere  lightened ;  and  yet 
the  total  net  import  of  specie  in  the  first  four  years,  was  but 
$17,000,000,  or  $4,250,000  per  annum  !  In  the  last  year  occurred 
the  Irish  famine,  creating  a  great  demand  for  food ;  the  conse- 
quence of  which  was,  an  import  of  no  less  than  $22,000,000  of 
gold  —  making  a  total  import,  in  five  years,  of  $39,000,000. 
Deducting  from  this  but  $4,000,000  per  annum  for  consumption, 
it  leaves  an  annual  increase,  for  the  purposes  of  circulation,  of 
less  than  $5,000,000  ;  and  yet  the  difference  in  the  prices  of  labor 
and  land  in  1847,  as  compared  with  1842,  would  be  lowly  esti- 
mated, if  placed  at  only  $2,000,000,000. 

With  1847,  however,  there  came  another  change  of  policy  — 
the  nation  being  again  called  upon  to  try  the  system  under  which 
it  had  been  prostrated  in  1840-'42.  The  doctrines  of  Hume  and 
Smith,  in  reference  to  the  balance  of  trade,  were  again  adopted 
as  those  by  which  a  government  was  to  be  directed  in  its  move- 
ments. Protection  being  then  repudiated,  the  consequences  were 
speedily  seen  in  the  fact,  that  within  three  years,  factories  and  fur- 
naces were  again  closed,  labor  was  seeking  demand,  and  gold  was 
flowing  out  even  more  rapidly  than  it  had  come  in,  under  the 
tariff  of  1842.  The  excess  export  of  those  three  years  amounted 
to  $14,000,000 ;  and  if  to  this  be  added  $15,000,000  for  con- 
sumption, it  follows  that  the  reduction  was  equal  to  the  total 
increase  under  the  previous  system.  Circulation  was  rapidly 
diminishing,  and  a  crisis  was  close  at  hand,  when,  fortunately 
for  the  advocates  of  the  existing  system,  the  gold  deposits  of  Cali- 
fornia were  brought  to  light.  Since  that  time,  we  have  exported 
some  hundreds  of  millions  of  dollars  of  gold,  and  have  contracted 
some  hundreds  of  millions  of  foreign  debt ;  and  the  result  is  seen, 
in  the  facts,  that  money  has  ceased  to  circulate  —  that  the  primi- 
tive form  of  barter  is  taking  the  place  of  the  more  civilized  form 
of  purchase  and  sale  —  that  merchants,  by  thousands,  are  utterly 
bankrupt  —  that  counties,  towns,  and  cities,  are  unable  to  pay  the 
interest  on  their  debts — that  commerce  scarcely  exists  —  and  that, 
the  Federal  treasury  is  forced  to  the  use  of  treasury  notes,  which 
are  already  at  a  discount,  when  compared,  even,  with  irredeem- 
able bank  notes. 

Such,  Mr.  President,  is  the  result,  as  thus  far  reached,  of  the 


86  LETTERS  TO  THE 

regulation  of  the  currency  by  the  central  government.  Such  most 
it  continue  to  be,  and  for  the  reason  that,  while  the  government 
is  unceasing  in  its  efforts  to  compel  the  people  to  forego  the  use 
of  bank  notes,  it  is  equally  unceasing  in  its  efforts  to  reduce  the 
prices  of  all  the  products  of  the  soil,  and  thus  compel  the  export  of 
the  precious  metals.  Under  a  different  policy,  gold  and  silver  — 
flowing  steadily  in  —  would  gradually  take  the  place  of  paper ; 
but,  under  the  existing  one,  if  fully  carried  out,  we  must  be  reduced 
to  barter  —  bank  notes  not  being  permitted  to  circulate,  and  the 
precious  metals  not  being  permitted  to  remain  amongst  us.  Look 
in  what  direction  we  may,  Mr.  President,  we  meet,  at  home,  with 
evidences  of  declining  civilization ;  but  nowhere  can  higher  proof 
be  found,  than  in  the  history  of  the  crusade  of  the  central  govern- 
ment against  the  local  banks  and  their  circulation. 
Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  January  29th,  1858. 


PRESIDENT  OF   THE   UNITED   STATES.  87 


LETTER  SIXTEENTH. 

"  IN  every  kingdom  into  which  money  begins  to  flow  in  greater 
abundance  than  formerly,  everything,"  says  Mr.  Hume,  in  his 
well-known  Essay  on  Money,  "takes  a  new  face  :  labor  and  in- 
dustry gain  life ;  the  merchant  becomes  more  enterprising,  the 
manufacturer  more  diligent  and  skilful ;  and  even  the  farmer  fol- 
lows his  plough  with  more  alacrity  and  attention." 

That  this  is  so,  Mr.  President,  is  well  known  to  all.  Why 
should  it  be  so  ?  Because  the  circulation  of  society  then  increases, 
and  all  power  —  whether  in  the  physical  or  social  world  —  results 
from  motion.  When  money  is  flowing  in,  every  man  is  enabled 
to  find  a  purchaser  for  his  labor,  and  to  become  a  purchaser  of 
that  of  others.  Therefore  has  it  been,  that  commerce  has  so 
steadily  increased  in  those  countries  in  which  the  Californian  and 
Australian  products  have  so  rapidly  accumulated  —  France,  Ger- 
many, and  Northern  and  Western  Europe  generally.  When,  on 
the  contrary,  money  flows  out,  the  circulation  diminishes,  and 
labor  is  everywhere  wasted.  That  labor-power  being  capital,  the 
result  of  the  consumption  of  other  capital  in  the  form  of  food, 
all  the  difference  between  an  advancing  and  a  declining  state  of 
society,  is  found  in  the  fact,  that  in  the  one,  there  is  a  constant 
increase  in  the  rapidity  with  which  the  demand  for  muscular  or 
mental  power  follows  its  production,  while  in  the  other,  there  is 
a  daily  diminution  therein.  The  more  instantly  the  demand  fol- 
lows the  supply,  the  more  is  the  force  economized,  and  the  larger 
is  the  power  of  accumulation.  The  longer  the  interval  between 
production  and  consumption,  the  greater  is  the  waste  offeree,  and 
the  less  is  the  power  of  accumulation. 

Of  all  the  machinery  in  use  among  men,  there  is  none  that  exer- 
cises upon  their  actions  so  great  an  influence,  as  that  which  gathers 
up  and  divides  and  subdivides,  and  then  gathers  up  again,  to  be 
on  the  instant  divided  and  subdivided  again,  the  minutes  and 
quarter-hours  of  a  community.  It  is  the  machinery  of  association, 
and  the  indispensable  machinery  of  progress  ;  and  therefore  it  is, 
that  we  see  in  all  new,  or  poor,  communities  so  constant  an  effort 
to  obtain  something  to  be  used  in  its  stead  ;  as  is  shown  in  various 
countries  in  which  an  irredeemable  paper  constitutes  the  medium 
of  exchange.  Throughout  the  West,  a  currency  of  some  descrip- 
tion is  felt  to  be  among  the  prime  necessities  of  life.  So  well  is 
this  want  understood,  that  many  Eastern  banks  supply  notes  ex- 
pressly for  Western  circulation  —  the  people  there  passing  them 
from  hand  to  hand,  because  any  money  is  better  than  none,  and 
good  they  cannot  get,  for  the  reason  that  metallic  money  always 
flows  from  the  place  where  the  charge  for  its  use  is  high,  to  that 


88  LETTERS   TO   THE 

at  which  it  is  low.  The  rate  of  interest  in  the  West  is  now  enor- 
mous, but  each  successive  day  witnesses  the  export  of  gold  to  the 
East,'whcre  it  is  somewhat  less  ;  and  yet,  even  our  high  interest — 
ranging,  as  it  has  done  for  years,  between  ten  and  thirty  per  cent. 
per  annum  —  cannot  prevent  it  from  going  to  France  and  Ger- 
many, where  it  commands  but  five  or  six  per  cent.  Money  thus 
obeys  the  same  law  as  water  —  seeking  always  the  lowest  level. 
The  latter  falls  upon  the  hills,  but,  from  the  moment  of  its  fall,  it 
never  stops  until  it  reaches  the  ocean ;  nor  does  the  gold  of  Cali- 
fornia, or  the  silver  of  Mexico,  stop  until  it  reaches  that  point  at 
which  money  most  abounds,  and  at  which,  for  that  reason,  the 
price  paid  for  its  use  is  lowest. 

Of  all  the  commodities  in.  use  by  man,  the  precious  metals  are 
those,  Mr.  President,  whose  movements  furnish  the  most  perfect 
test  of  the  soundness,  or  unsoundness,  of  its  commercial  system. 
They  go  from  those  countries  whose  people  are  engaged  in  ex- 
hausting the  soil,  to  those  in  which  they  renovate  and  improve  it. 
They  go  from  those  at  which  the  price  of  raw  products,  and  the 
land  itself,  is  low  — from  those  at  which  money  is  scarce,  and 
interest  is  high.  The  country  that  desires  to  attract  them,  and 
thus  to  lower  the  charge  for  the  use  of  money,  has,  then,  only  to 
adopt  the  measures  required  for  raising  the  price  of  land  and 
labor.  In  all  countries,  the  value  of  land  grows  with  that  de- 
velopment of  the  human  faculties  which  results  from  diversity  in 
the  modes  of  employment,  and  consequent  growth  of  the  power 
of  combination.  That  power  grows  in  all  the  countries  of  North- 
ern Europe ;  and  for  the  reason,  as  has  been  shown,  that  all  those 
countries  have  adopted  the  course  of  policy  recommended  by  Col- 
bert, and  carried  out  by  France.  It  declines  in  Great  Britain,  in 
Ireland,  in  Portugal,  in  Turkey,  in  the  Eastern  and  Western  In- 
dies, and  in  all  countries  that  follow  the  teachings  of  the  British 
school.  It  has  grown  among  ourselves  in  every  period  of  protec- 
tion ;  and  then  —  money  having  flowed  in  —  land  and  labor  have 
risen  in  value.  It  has  diminished  in  every  period  in  which  foreign 
trade  has  obtained  the  mastery  over  domestic  commerce.  Land 
and  labor  have  always  declined  in  value  as  soon  as  our  people 
had  eaten,  drunk,  and  worn  foreign  merchandise  to  the  extent 
of  hundreds  of  millions  of  dollars,  beyond  the  value  of  their  ex- 
ports of  the  rude  products  of  the  soil,  and  have  thus  compelled 
the  withdrawal  of  the  "  metallic  basis  "  of  their  paper  circulation. 

We  are  told,  however,  by  the  same  writer  —  Mr.  Hume  —  and 
in  that  he  is  followed  by  the  modern  economists  —  that  the  only 
effect  of  an  increase  of  the  supply  of  gold  and  silver  is  that  of 
"heightening  the  price  of  commodities,  and  obliging  every  one  to 
pay  more  of  those  little  yellow  or  white  pieces  for  everything  he 
purchases."  Were  such  really  the  case,  it  would  be  little  short  of  a 
miracle,  that  we  should  see  money  always,  century  after  century, 
passing  in  the  same  direction  —  to  the  countries  that  are  rich 


PRESIDENT   OF  THE   UNITED   STATES.  89 

from  those  that  are  poor ;  so  poor,  too,  that  they  cannot  afford 
to  keep  as  much  of  it  as  is  required  for  their  own  exchanges.. 
The  gold  of  Siberia  leaves  a  land  in  which  so  little  circulates,  that 
labor  and  its  products  are  at  the  lowest  prices,  to  find  its  way  to 
St.  Petersburg,  where  it  will  purchase  less  labor,  and  less  of  either 
wheat  or  hemp,  than  it  would  do  at  home  ;  and  that  of  Carolina 
and  Virginia  goes  steadily  and  regularly,  year  after  year,  to  the 
countries  to  which  the  people  of  those  States  send  their  cotton 
and  their  wheat,  because  of  the  higher  prices  at  which  they  sell. 
The  silver  of  Mexico,  and  its  cochineal,  travel  together  to  the 
same  market ;  and  the  gold  of  Australia  passes  to  Britain  by  the 
ship  which  carries  the  wool  yielded  by  the  flocks. 

Every  addition  to  the  stock  of  money,  as  we  are  assured  by  the 
ingenious  men  of  modern  days,  engaged  in  compiling  treasury  tables 
and  finance  reports,  renders  a  country  a  good  place  to  sell  in,  but 
a  bad  one  in  which  to  purchase.  To  what  countries,  however,  is 
it,  that  men  have  most  resorted  when  they  desired  to  purchase  ? 
Have  they  not,  until  recently,  gone,  almost  exclusively,  to  Britain  ? 
It  has  been  so,  assuredly ;  and  for  the  reason,  that  there  it  has 
been,  that  finished  commodities  were  cheaply  furnished.  Where 
have  they  gone  to  sell  ?  Has  it  not  been  to  Britain  ?  It  certainly 
has  been  so  ;  and  for  the  reason,  that  there  it  was?,  that  gold,  cot- 
ton, wheat,  and  all  other  of  the  rude  products  of  the  earth,  were 
dear.  Where  do  they  now  most  tend  to  go  when  they  desire  to 
purchase  cloths  or  silks  ?  Is  it  not  to  France  and  Germany  ?  So 
it  certainly  is  ;  and  for  the  reason,  that  there  it  is  that  raw  mate- 
rials are  highest,  and  finished  ones  are  cheapest.  Gold  follows  in 
the  train  of  raw  materials  generally  —  these  last  being  found,  in- 
variably, travelling  to  those  places  at  which  the  rude  products  of 
the  earth  command  the  highest  prices,  while  cloth,  iron,  and  manu- 
factures of  iron  and  other  metals,  maybe  purchased  at  the  lowest; 
and  the  greater  the  flow  in  that  direction,  the  greater  is  the  ten- 
dency to  further  enhancing  the  prices  of  the  former,  and  reducing 
those  of  the  latter.  From  this  it  would  seem,  Mr.  President,  that 
increase  in  the  supply  of  money,  so  far  from  having  the  effect  of 
causing  men  to  give  two  pieces  for  an  article  that  could  before 
have  been  had  for  one,  has,  on  the  contrary,  that  of  enabling 
them  to  obtain  for  one  piece  the  commodity  that  before  had  cost 
them  two;  and  that  such  is  the  fact,  can  readily  be  shown. 

The  stock  of  gold  among  ourselves,  has,  within  the  last  few 
years,  been  much  increased ;  and  yet,  so  far  is  it,  from  producing 
the  effects  above  described,  that  the  prices  of  wheat,  cotton,  to- 
bacco, and  all  our  other  products,  now  steadily  decline,  and  the 
farmer  and  planter  have  in  prospect,  lower  prices  than  they  have 
ever  seen.  Why,  Mr.  President,  is  this  the  case  ?  Because,  for 
more  than  twenty  years,  the  central  government  has  been  engaged 
in  an  almost  unceasing  effort  to  promote  the  habit  of  hoarding 
the  precious  metals,  and  thus — by  lessening  their  power  of  circu- 


90  LETTERS   TO   THE 

lation  —  has  almost  annihilated  their  utility.  Because,  in  the 
vain  hope  of  establishing,  by  means  of  such  measures,  "  a  hard 
money  currency,"  it  has  waged  an  almost  unceasing  war  upon 
public  and  private  credit  —  prohibiting  the  use  of  circulating 
notes  in  all  transactions  in  which  it  is  itself  concerned,  and  urging 
upon  the  local  authorities,  the  necessity  for  following  its  example. 
With  it,  freedom  of  trade  in  reference  to  the  most  important  of 
all  the  commodities  in  use  by  man,  has  not  consisted  in  letting 
the  people  think  and  act  for  themselves,  but  in  compelling  them 
to  act  in  obedience  to  its  mandates. 

The  use  of  circulating  notes  tends,  however,  as  we  are  assured, 
to  promote  the  expulsion  of  gold.  Were  it  to  do  so,  Mr.  Presi- 
dent, it  would  be  in  opposition  to  the  great  general  law,  in  virtue 
of  which  all  commodities  tend  to,  and  not  from.,  the  places  at 
which  their  utility  is  greatest.  Cotton-wool  tends  to  go  from 
the  plantation,  and  to  the  mill.  Hides  tend  to  go  from  the  farm, 
and  to  the  tanner's  yard.  Gold  and  silver  tend  to  go  from  Peru 
and  California,  and  to  those  places  at  which  such  metals  are  most 
required  in  the  arts,  and  at  which  industry  is  most  diversified  — 
the  same  laws  thus  governing  all  commodities,  be  they  what 
they  may. 

A  bank,  Mr.  President,  is  a  machine  for  utilizing  money,  by 
enabling  A,  B,  and  C,  to  obtain  the  use  of  it  at  the  time  when 
D,  E,  and  F,  its  owners,  do  not  need  its  services.  The  direct 
effect  of  the  establishment  of  such  institutions  in  European  cities 
has  always  been  to  cause  money  to  flow  towards  those  cities  ;  and 
for  the  reason,  that  there  its  utility  stood  at  the  highest  point. 
Even  then,  however,  there  were  difficulties  attendant  upon  the 
change  of  property  in  the  money  deposited  with  the  bank  —  the 
owner  having  been  required  to  go  to  the  banking-house,  and  write 
it  off  to  other  parties.  To  obviate  this  difficulty,  and  thus  increase 
the  utility  of  money,  its  owners  were  at  length  authorized  to  draw 
checks,  by  means  of  which  they  were  enabled  to  transfer  their 
property — without  stirring  from  their  houses. 

The  difficulty  still,  however,  existed,  that  —  private  individuals 
not  being  generally  known  —  such  checks  could,  in  general,  effect 
but  a  single  transfer ;  and  thus,  the  recipient  of  money  found 
himself  obliged  to  go  through  the  operation  of  taking  possession 
of  that  which  had  been  transferred  to  him,  after  which  he  had,  in 
his  turn,  to  draw  a  check,  when  he  himself  desired  to  effect  an- 
other change  of  property.  To  obviate  this,  circulating  notes  were 
invented,  by  help  of  which  the  ownership  of  money  is  now  trans- 
ferred with  such  rapidity,  that  a  single  hundred  dollars  passes 
from  hand  to  hand  fifty  times  a  day  —  effecting  exchanges,  per- 
haps, to  the  extent  of  many  thousand  dollars,  and  without  the 
parties  being  at  any  time  required  to  devote  even  a  single  instant 
to  the  work  of  counting  coin.  This  was  a  great  invention,  by 
aid  of  which  the  utility  of  money  was  so  much  increased,  that  a 


PEESIDENT   OF  THE   UNITED   STATES.  91 

single  thousand  pieces  could  be  made  to  do  more  work  than,  with- 
out it,  could  be  done  by  hundreds  of  thousands. 

This,  of  course,  as  we  are  told,  supersedes  gold  and  silver,  and 
causes  them  to  be  exported.  So  we  are  certainly  assured,  by  those 
economists  who  regard  man  as  an  animal  that  must  be  fed,  and 
will  procreate — as  a  slave,  who  can  be  made  to  work  only  under 
the  pressure  of  a  strong  necessity.  Were  they,  however,  to  look, 
for  once,  at  the  real  MAN  —  the  being  made  in  the  image  of  his 
Creator,  and  capable  of  almost  infinite  elevation  —  they  would, 
perhaps,  arrive  at  a  conclusion  widely  different.  The  desires  of 
that  man  being  infinite,  the  more  they  are  gratified,  the  more 
rapidly  do  they  increase  in  number.  The  miserable  Hottentot 
dispenses  with  a  road  of  any  kind,  but  the  enlightened  and  intel- 
ligent people  of  other  countries,  are  seen  passing  in  succession 
from  the  ordinary  village  road  to  the  turnpike,  and  thence  to  the 
railroad  ;  and  the  better  the  existing  communications,  the  greater 
is  the  thirst  for  further  improvement.  The  better  the  schools 
and  houses,  the  greater  is  the  desire  for  superior  teachers,  and  for 
further  additions  to  the  comforts  of  the  dwelling.  The  more  per- 
fect the  circulation  of  society,  the  larger  is  the  reward  of  labor, 
and  the  greater  is  the  power  to  purchase  gold  and  silver,  to  be 
used  for  the  various  purposes  for  which  they  are  so  admirably 
fitted ;  and  the  greater  is  the  tendency  to  have  them  flow  to  the 
places  at  which  that  circulation  is  established.  Money  promotes 
the  circulation  of  society.  The  check  and  the  bank  note  stimu- 
late that  circulation  —  giving  thereby  value  to  labor  and  land; 
and  wherever  checks  and  notes  are  most  in  use,  there,  Mr.  Presi- 
dent, should  the  inward  current  of  the  precious  metals  be  most 
fully  and  firmly  established. 

That  such  is  the  case,  is  proved  by  the  facts,  that,  for  a  century 
past,  the  precious  metals  have  tended  most  to  Britain,  where  such 
notes  were  most  in  use.  Their  use  increases  rapidly  in  France, 
with  constant  increase  in  the  inward  flow  of  gold.  So,  too,  does 
it  in  Germany,  towards  which  the  auriferous  current  now  sets  so 
steadily,  that  notes  which  are  the  representatives  of  money,  are 
rapidly  taking  the  place  of  those  irredeemable  pieces  of  paper,  by 
which  the  use  of  coin  has  so  long  been  superseded. 

Whence  flows  all  this  gold  ?  From  the  countries  in  which  em- 
ployments are  not  diversified ;  from  those,  in  which  there  is  little 
power  of  association  and  combination  ;  from  those,  in  which,  there- 
fore, credit  has  no  existence ;  from  those,  finally,  which  do  not 
use  that  machinery  which  so  much  increases  the  utility  of  the  pre- 
cious metals,  and  which  we  are  accustomed  to  designate  by  the 
term  bank-note.  The  precious  metals  go  from  California — from 
Mexico  — from  Peru  — from  Brazil  — from  Turkey  —  and/rom 
Portugal  —  the  lands  in  which  property  in  money  is  transferred 
only  by  means  of  actual  delivery  of  the  coin  itself — to  those,  in 
which  it  is  transferred  by  means  of  a  check,  or  note.  They  go  from 


92  LETTERS   TO   TUB 

the  plains  of  Kansas,  where  notes  are  not  in  use,  to  New  York 
and  New  England,  where  they  are — from  Siberia  to  St.  Peters- 
burg— from  the  banks  of  African  rivers  to  London  and  Liver- 
pool—  and  from  the  "diggings  "  of  Australia  to  the  towns  and 
cities  of  Germany,  where  wool  is  dear  and  cloth  is  cheap. 

All  the  facts  exhibited  throughout  the  world  tend,  Mr.  Presi- 
dent, to  prove  that  every  commodity  seeks  that  place  at  which  it 
has  the  highest  utility ;  and  -all  those  connected  with  the  move- 
ment of  the  precious  metals  prove  that  they  constitute  no  excep- 
tion to  the  rule.  Bank  notes  —  increasing  the  utility  of  those 
metals  —  should,  therefore,  attract,  and  not  repel,  them.  Never- 
theless, the  two  nations  of  the  world  which  claim  best  to  under- 
stand the  principles  of  commerce,  are  now  engaged  in  a  crusade 
against  such  notes ;  and  in  the  vain  hope  of  thereby  rendering 
their  several  countries  more  attractive  of  the  produce  of  the  mines 
of  Peru  and  Mexico,  Australia  and  California.  The  result  is 
seen  in  the  fact,  that  both  are  nearly  bankrupt. 

It  is  a  great  mistake ;  and  its  existence  here  is  due  to  the  fact, 
that  our  system  of  policy  tends  to  that  expulsion  of  the  precious 
metals,  which  always  must  result  from  the  long-continued  export 
of  the  raw  products  of  the  earth.  The  administration  that 
adopted  what  is  called  free  trade,  was  the  same  that  commenced 
the  system  of  compelling  the  community  to  use  gold  instead  of 
notes ;  and  the  result  was  found  in  the  total  disappearance  of 
coin  from  circulation.  From  that  time  to  the  present,  the 
motto  of  the  generally  dominant  party  of  the  Union  has  been — 
"War  to  the  death  against  bank  notes";  and,  with  a  view  to 
promote  their  expulsion,  laws  have  been  passed  in  various  States, 
forbidding  their  use,  except  when  of  too  great  size  to  enter  freely 
into  the  transactions  of  the  community.  As  must,  however,  in- 
evitably be  the  case,  the  tendency  to  the  loss  of  the  precious 
metals  has  always  been  in  the  direct  ratio  of  the  diminution  in 
their  utility  thus  produced.  At  one  time  only,  in  almost  twenty 
years,  has  there  been  an  excess  import  of  those  metals,  and  that 
was  under  the  tariff  of  1842.  Then,  money  became  abundant 
and  cheap  ;  because  the  policy  of  the  country  looked  to  the  pro- 
motion of  association  and  the  extension  of  domestic  commerce. 
Now,  it  is  scarce  and  dear ;  because  that  policy  limits  the  power 
of  association,  and  establishes  the  supremacy  of  trade. 

Careful  study  of  these  facts,  can  scarcely,  Mr.  President,  fail  to 
satisfy  you,  that  the  cause  of  difficulty  lies  wholly  in  the  central 
government ;  and  that,  to  that  government  it  is,  we  are  to  look 
for  change.  The  expansions  and  contractions  of  which  you 
so  much,  and  so  justly  too,  complain,  having  all  occurred  in  those 
periods  in  which  the  policy  of  the  Union  has  tended  towards  the 
sacrifice  of  domestic  commerce  —  towards  the  exhaustion  of  the 
soil  —  towards  the  depression  of  the  prices  of  the  farm  and  the 
plantation  —  and  towards  the  expulsion  of  our  people  from  the 


PRESIDENT   OP   THE   UNITED   STATES.  93 

older  States,  the  remedy  is  to  be  found  in  the  adoption  of  one 
which  shall  look  to  the  extension  of  domestic  commerce  —  to  the 
creation  of  a  real  agriculture  —  to  the  elevation  of  the  rewards 
of  labor  employed  upon  the  land  —  and  to  the  concentration  of 
our  population.  That  policy,  Mr.  President — giving  us  that 
real  free  trade  which  you  so  much  admire  —  would  enable  us  to 
import,  and  to  retain,  abundant  supplies  of  the  precious  metals, 
and  thus  to  establish,  upon  a  sure  foundation,  the  hard  money 
currency  you  so  anxiously  desire. 

"  No  other  nation,"  as  you  most  truly  say,  "has  ever  existed, 
which  could  have  endured  such  violent  expansions  and  contrac- 
tions of  paper  credits,  without  lasting  injury."  No  other  nation 
has  been  so  unfortunate  as  to  have  a  government  always  at  war 
with  public  and  private  credit ;  and  none  other,  after  so  long  a 
period  of 'intestine  war,  could  have  retained  so  much  vitality.  — 
Let  the  central  government,  Mr.  President,  review  its  action 
during  the  last  twenty  years  —  let  it  see  that  its  policy  has  looked 
to  the  destruction  of  that  internal  commerce  upon  which,  alone, 
a  prosperous  foreign  one  can  be  built  —  let  it  follow  in  the  foot- 
steps of  the  patriots  of  the  Revolution  —  and  your  hopes  in  the 
future  will  all  be  realized  —  "the  buoyancy  of  youth,  the  energies 
of  our  population,  and  the  spirit  which  never  quails  before  diffi- 
culties,"  then,  but  not  otherwise,  enabling  us  "to  recover  from 
our  financial  embarrassments, "  and  "  even  occasioning  us  speedily 
to  forget  the  lessons  they  have  taught."  Each  and  every  period 
of  what  is  called  free  trade,  having  ended  in  bankruptcy,  on  each 
and  every  occasion,  general  wealth,  peace,  happiness,  and  con- 
stantly increasing  power,  have  resulted  from  the  adoption  of  pro- 
tection. So,  Mr.  President,  must  it  ever  be  —  the  depression  and 
ruin  of  the  agricultural  interest  being  the  necessary  consequences 
of  the  former  of  these  systems,  and  its  elevation  having  always 
resulted  from  the  adoption  of  the  latter. 
With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  February  2d,  1858. 


94  LETTERS   TO   THE 


LETTER    SEVENTEENTH. 

CIVILIZKD  communities  —  those  communities,  Mr.  President, 
which  have  obtained  that  freedom  of  domestic  intercourse  which, 
as  you  have  seen,  we  so  sorely  need  —  follow  the  advice  of  Adam 
Smith,  in  exporting  their  wool,  and  their  corn,  in  the  form  of 
cloth,  at  little  cost  for  transportation.  Thus,  France,  in  1856, 
exported  silks  and  cloths,  clothing,  paper,  and  articles  of  furni- 
ture, to  the  extent  of  $300,000,000  ;  and  yet  the  total  weight  was 
short  of  40,000  tons  —  requiring  for  its  transport  but  forty  ships 
of  very  moderate  size. 

Barbarous,  and  semi-barbarous  countries,  on  the  contrary',  ex- 
port their  commodities  in  their  rudest  state,  at  heavy  cost  for  trans- 
portation. India  sends  the  constituents  of  cloth — cotton,  rice, 
and  indigo  —  to  exchange,  in  distant  markets,  for  the  cloth  itself. 
Brazil  sends  raw  sugar  across  the  ocean,  to  exchange  for  that 
which  has  been  refined.  We  send  wheat  and  Indian  corn,  pork 
and  flour,  cotton  and  rice,  fish,  lumber,  and  naval  stores,  to  be 
exchanged  for  knives  and  forks,  silks  and  cottons,  paper  and 
China-ware.  The  total  value  of  these  commodities  exported  in 
1856 — high  as  were  then  the  prices  —  was  only  $230,000, 000 ;  and 
yet,  the  American  and  foreign  ships  engaged  in  the  work  of  trans- 
port, were  of  the  capacity  of  6,872,253  tons  —  requiring  for  their 
management  no  less  than  269,000  persons.* 

In  the  movement  of  all  this  property,  Mr.  President,  there  is 
great  expense  for  transportation.  Who  pays  it  ?  Ask  the  farmer 
of  Iowa,  and  he  will  tell  you,  that  he  sells  for  15  cents  —  and  that, 
too,  payable  in  the  most  worthless  kind  of  paper  —  a  bushel  of 
corn  that,  when  received  in  Manchester,  commands  a  dollar ;  and 
that  he,  in  this  manner,  gives  to  the  support  of  railroads  and 
canals,  ships  and  sailors,  brokers  and  traders,  no  less  than  eighty- 
Jive  per  cent,  of  the  intrinsic  value  of  his  products.  Ask  him 
once  again,  and  he  will  tell  you,  that  while  his  bushel  of  corn 
will  command,  in  Manchester,  18  or  20  yards  of  cotton  cloth,  he 
is  obliged  to  content  himself  with  little  more  than  a  single  yard — 
eighty-Jive  per  cent,  of  the  clothing  power  of  his  corn  having 
been  taken,  on  the  road,  as  his  contribution  towards  the  tax  im- 
posed upon  the  country,  for  the  maintenance  of  the  machinery  of 
that  "free  trade"  which,  as  you,  Mr.  President,  have  so  clearly 
seen,  is  the  sort  of  freedom  we  do  not,  at  present,  need. 

The  country  that  exports  the  commodity  of  smallest  bulk,  is 

*  This  is  the  total  tonnage  that  arrived  from  foreign  countries,  in  that 
year.  A  small  portion  was  required  for  the  transport  of  manufactured  com- 
modities, but  it  was  so  small  as  scarcely  to  require  notice. 


PRESIDENT   OF   THE   UNITED   STATES.  95 

almost  wholly  freed  from  the  exhausting  tax  of  transportation. 
At  Havre  —  ships  being  little  needed  for  the  outward  voyage, 
while  ships  abound — the  outward  freights  must  be  always  very  low. 

The  community  that  exports  the  commodities  of  greatest  bulk, 
must  pay  nearly  all  the  cost  of  transportation.  A  score  of  ships 
being  required  to  carry,  from  our  ports,  the  lumber,  wheat,  or 
naval  stores,  the  tobacco,  or  the  cotton,  required  to  pay  for  a 
single  cargo  of  cloth,  the  outward  freights  must  always  be  at,  or 
near,  that  point  which  is  required  to  pay  for  the  double  voyage  — 
and  every  planter  knows,  to  his  cost,  how  much  the  price  of  his 
cotton  is  dependent  upon  the  rate  of  freight. 

In  the  first  of  these,  Mr.  President,  employments  become,  from 
day  to  day,  more  thoroughly  diversified  —  the  various  human 
faculties  become  more  and  more  developed  —  the  power  of  com- 
bination tends  steadily  to  increase  —  agriculture  becomes  more 
and  more  a  science  —  the  land  becomes  more  productive  —  the 
societary  movement  becomes  more  stable  and  regular  —  and  the 
power  to  purchase  machinery  of  every  kind,  whether  ships,  mills, 
or  the  precious  metals,  tends  steadily  to  augment. 

In  the  last,  the  reverse  of  this  is  found  —  the  pursuits  of  men 
becoming  less  diversified — the  demand  for  human  faculty  becom- 
ing more  and  more  limited  to  that  for  mere  brute  force,  or  for  the 
craft  by  which  the  savage  is  so  much  distinguished  —  the  power 
of  association  tending  to  decline  —  agriculture  becoming  less  and 
less  a  science,  and  the  land  becoming  more  and  more  exhausted — 
the  societary  movement  acquiring,  more  and  more,  the  fitfulness 
and  irregularity  of  movement  you  have  so  well  described,  as  exist- 
ing among  ourselves  —  and  the  power  to  obtain  machinery  of  any 
kind  tending  steadily  to  diminish. 

The  first  of  these,  Mr.  President,  may  be  found  in  the  countries 
of  Central  and  Northern  Europe  —  those  which  follow  in  the  lead 
of  Colbert  and  of  France.  All  of  these,  are  gradually  emancipating 
themselves  from  the  most  oppressive  of  all  taxes,  the  tax  of  trans- 
portation. All  of  them,  therefore,  are  moving  in  the  direction  of 
growing  wealth  and  power,  with  correspondent  advance  in  civiliza- 
tion, and  in  freedom. 

The  last  may  be  found  in  Ireland,  India,  Jamaica,  Portugal, 
Turkey,  and  these  United  States  —  the  countries  which  follow  in 
the  lead  of  England.  All  of  these,  are  becoming  more  and  more 
subjected  to  the  tax  of  transportation.  All  of  them,  therefore, 
are  declining  in  wealth  and  power,  in  civilization,  and  in  freedom. 

In  the  first,  the  land  yields  more  and  more  with  each  successive 
vear  —  wjth  constant  increase  in  the  power  of  a  bushel  of  wheat, 
or  a  pound  of  wool,  to  purchase  money.  In  the  last,  the  land 
yields  less  from  year  to  year,  with  constant  tendency  to  decline  in 
the  price  of  food  and  cotton.  The  first,  import  the  precious  metals. 
The  last,  export  them.  The  first,  find  daily  increase  of  power  to 
maintain  a  specie  circulation,  as  the  basis  of  the  higher  and  better 


96  LETTERS   TO   THE 

currency  supplied  by  banks.  The  last,  are  gradually  losing  the 
power  to  command  a  circulation  of  any  kind,  and  tending,  more 
and  more,  towards  that  barbaric  system  of  commerce  which  con- 
sists in  exchanging  labor  against  food,  or  wool  and  corn  against 
cloth. 

We  may  be  told,  however,  Mr.  President,  that  in  return  for 
the  eighty-five  per  cent,  of  his  products  that,  as  we  see,  is 
paid  by  the  farmer  of  Iowa,  and  by  the  Texan  planter,  we  are 
obtaining  a  magnificent  system  of  railroads  —  that  our  mercantile 
marine  is  rapidly  increasing  —  that,  by  its  means,  we  are  to  secure 
the  command  of  the  commerce  of  the  world,  &c. ,  &c.  How  far 
all  this  is  so,  we  may  now  inquire.  To  me,  it  certainly  appears, 
that  if  this  be,  really,  the  road  to  wealth  and  power  —  it  would 
be  well  to  require  the  exportation  of  wheat  instead  of  flour,  paddy 
in  place  of  rice,  cotton  in  the  seed,  corn  in  the  ear,  and  lumber  in 
the  shape  of  logs,  rather  than  in  that  of  planks. 

Looking,  first,  to  our  internal  commerce,  we  find  a  mass  of 
roads,  most  of  which  have  been  constructed,  by  help  of  bonds, 
bearing  interest  at  the  rate  of  6,  8,  or  10  per  cent.  —  bonds  that 
have  been  disposed  of,  in  the  market,  at  60,  70,  or  80  per  cent. 
of  their  nominal  value,  and  could  not  now,  probably,  be  re-sold 
at  more  than  half  the  price  at  which  they  were  originally  bought. 
Half  made,  and  little  likely  ever  to  be  completed,  these  roads  are 
worked  at  great  expense  —  while  requiring  constant  and  great 
repairs.  As  a  consequence  of  this  it  is,  that  the  original  pro- 
prietors have  almost  wholly  disappeared — the  stock  being  of  little 
worth.  The  total  amount  applied  to  the  creation  of  railroads  hav- 
ing been  about  $1000,000,000,  and  the  average  present  value 
scarcely  exceeding  40,  if  even  30,  per  cent.,  it  follows  that 
$600,000,000  have  been  sunk,. and  with  them,  all  power  to  make 
new  roads.  Never,  -at  any  period  of  our  history,  have  we  been, 
in  this  respect,  so  utterly  helpless  as  at  present.  Nevertheless, 
the  policy  of  the  central  government  looks  steadily  to  the  disper- 
sion of  our  people,  to  the  occupation  of  new  territories,  to  the 
creation  of  new  States,  and  to  the  production  of  a  necessity  for 
further  roads.  That,  Mr.  President,  is  the  road  to  physical  and 
moral  decline,  and  political  death,  as  will  soon  be  proved,  unless 
we  change  our  course. 

The  railroad  interest  being  in  a  state  of  utter  ruin,  we  may  now 
turn  to  the  shipping  one,  with  a  view  to  see  how  far  we  are  likely, 
by  its  aid,  to  obtain  that  command  of  the  commerce  of  the  world, 
so  surely  promised  to  us,  by  the  author  of  the  tariff  of  '46. 
Should  that  prove  to  be  moving  in  the  same  direction,  the  fact 
will  certainly  afford  new  and  stronger  proof  of  the  perfect  accu- 
racy of  your  own  views,  Mr.  President,  as  to  the  sort  of  freedom 
we  so  much  require. 

In  a  state  of  barbarism — person  and  property  being  insecure — 
the  rate  of  insurance  is  high.  Passing  thence  towards  civiliza- 


PRESIDENT  OF   THE   UNITED   STATES.  97 

tion,  security  increases,  and  the  rate  of  insurance  declines,  as  we 
see  it  to  be  so  rapidly  doing,  in  reference  to  fire,  in  all  the  ad- 
vancing countries  of  Europe.  Our  course,  in  reference  to  ship- 
ping, being  in  the  opposite  direction  —  security  diminishing,  when 
it  should  increase  —  the  rate  of  insurance  steadily  advances,  as 
here  is  shown  :  — 

Bates  of  Insurance  upon  American  Ships. 

1846.  1858. 

To  Cuba 1J  percent 1J  to  2  percent. 

"Liverpool ij         "         l|  to  2         " 

"   India  and  China If        "        2£  " 

To  and  from  Liverpool,  on  packet- 
ships,  annual  rates 5          "        8  " 

To  what  causes,  Mr.  President,  are  we  to  attribute  this  extra- 
ordinary change  ?  May  it  not  be  found  in  the  fact,  that  the  more 
we  abandon  domestic  commerce,  and  the  larger  the  amount  of 
taxation  imposed  upon  our  farmers  for  the  maintenance  of  trans- 
portation, the  greater  becomes  the  recklessness  of  those  who  gain 
their  living  out  of  that  taxation  ?  Look  back  to  the  last  free  trade 
period  —  that  from  1837  to  1841  — and  you  will  find  phenomena 
corresponding  precisely  with  those  which  are  now  exhibited, 
although  not  so  great  in  magnitude.  At  present,  the  utter  reck- 
lessness—  the  total  absence  of  conscientious  feeling — .here  exhi- 
bited, is  such  as  to  astonish  the  thinking  men  of  Europe. 
Railroad  accidents  have  become  so  numerous  as  scarcely  to  attract 
even  the  momentary  attention  of  the  reader,  and  the  loss  of  life 
becomes  greater  from  year  to  year.  Steamers  are  exposed  to  the 
storms  of  the  lakes,  that  are  scarcely  fit  to  navigate  our  rivers. 
Ships  that  are  unfit  for  carrying  insurable  merchandise,  are  em- 
ployed in  the  carriage  of  unfortunate  passengers  —  they  being  the 
only  commodity,  for  whose  safe  delivery  the  ship-owner  cannot  be 
made  responsible.  Week  after  week,  the  records  of  our  own  and 
foreign  courts,  furnish  new  evidence  of  decline  in  the  feeling  of  re- 
sponsibility which,  thirty  years  since,  characterized  the  owners  of 
American  ships,  and  the  men  therein  employed. 

Look  where  we  may,  Mr.  President,  on  the  sea,  or  on  the  land, 
evidences  of  demoralization  must  meet  our  view.  "  Stores  and 
dwellings  "  —  and  here  I  give  the  words  of  a  New  York  journal — 
"  are  constructed  of  such  wretched  materials  as  scarcely  to  be  able 
to  sustain  their  own  weight,  and  with  apologies  for  walls  which 
tumble  to  the  ground,  after  being  exposed  to  a  rain  of  a  few  hours' 
duration,  or  to  a  wind  which  possesses  sufficient  force  to  set  the 
dust  on  the  highways  in  motion.  Entire  blocks  of  edifices  are 
put  up,  with  the  joists  of  all  so  connected  with  each  other,  as  to 
form  a  complete  train  for  the  speedy  communication  of  fire  from 
one  to  another.  Joists  are  built  into  flues,  so  that  the  ends  are 
exposed  to  becoming  first  heated,  and  then  ignited  by  a  flying  spark. 
7 


98  LETTERS   TO   THE 

Rows  of  dwellings  and  warehouses  are  frequently  covered  with  a 
single  roof,  which  has  not,  in  its  whole  extent  of  combustible  ma- 
terial, a  parapet  wall,  or  other  contrivance,  to  prevent  the  spread 
of  the  flames  in  the  event  of  a  conflagration." 

The  feeling  of  responsibility,  Mr.  President,  grows  with  the 
growth  of  real  civilization.  It  declines  with  the  growth  of  that 
mock  civilization,  but  real  barbarism,  which  has  its  origin  in  the 
growing  necessity  for  ships,  wagons,  and  other  machinery  of  trans- 
portation. The  policy  of  the  central  government  tends  steadily 
towards  its  augmentation,  and  hence  it  is,  that  American  shipping 
so  steadily  declines  in  character,  and  in  the  proportions  which  it 
bears  to  that  of  the  foreigners  with  whom  we  are  required  to 
compete. 

Two  years  since,  we  were  told,  that  our  shipping  already  ex- 
ceeded 5,000,000  tons  —  that  we  had  become  the  great  maritime 
power  of  the  world  —  and,  of  course,  that  this  great  fact  was  to 
be  received  as  evidence  of  growing  wealth  and  power.  Last  year, 
however,  exhibited  it  as  standing  at  only  4,871,000  tons,  and 
future  years  are  likely  to  show  a  large  decrease  —  ships  having 
become  most  unprofitable.  More  than  four-fifths  of  the  products 
of  Western  farms,  and  South-western  plantations,  are,  as  we  have 
seen,  taken  for  the  support  of  railroads  and  ships ;  and  yet,  the 
roads  are  bankrupt,  while  the  ships  have  done  little  more,  for  some 
years  past,  than  ruin  the  men  who  owned  them.  Such  being  the 
case,  it  seems  little  likely,  that  it  is  by  means  of  sailing  ships  we 
are  to  acquire  that  control  of  the  commerce  of  the  world,  so  con- 
fidently promised  when,  in  1846,  we  were  led  to  abandon  the 
policy  which  looked  to  the  creation  of  a  domestic  commerce,  as 
the  true  foundation  of  a  great  foreign  one.  What  are  the  pros- 
pects in  regard  to  that  higher  description  of  navigation,  which 
invokes  the  aid  of  steam,  I  propose  to  show  in  another  letter  — 
remaining,  meanwhile,  Mr.  President, 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  February  6th,  1858. 


PRESIDENT   OF   THE   UNITED   STATES. 


LETTER   EIGHTEENTH. 

EVERY  improvement  in  the  construction  of  the  ship  tends  to 
lessen  the  proportion  borne  by  her  tonnage,  to  the  weight  of  the 
commodities  to  be  moved.  Every  improvement  in  the  quality  of 
the  commodities  moved,  tends  to  augment*  the  proportions  borne 
by  the  value  transported,  to  the  tonnage  of  the  ships  required  for 
its  transportation.  Here,  Mr.  President,  is  a  simple  principle, 
by  aid  of  which  we  may,  perhaps,  be  enabled  to  arrive  at  some 
conclusion  in  reference  to  the  tendency  of  our  present  policy  — 
progress  towards  civilization  having,  everywhere,  manifested  itself 
in  a  diminutio'n  in  the  proportions  borne  by  the  machinery  of 
transportation,  to  the  value  of  the  things  transported. 

In  the  first  year  which  followed  the  adoption  of  the  Compromise 
tariff,  that  of  1834-5,  we  sent  abroad,  cotton  and  tobacco,  food 
and  lumber,  to  the  amount  of  $92,000,000  ;  and  in  that  year,  the 
shipping,  domestic  and  foreign,  that  cleared  for  foreign  ports, 
amounted  to  2,030,000  tons.  Six  years  later,  in  1840-41,  when 
that  tariff  had  but  begun  to  operate,  we  exported,  of  the 
same  rude  products,  $98,000,000 — the  quantity  of  shipping 
clearing  from  our  ports  having,  in  the  same  period,  risen  to 
2,353,000  tons.  Two  years  since,  as  has  been  shown,  the  total 
value  of  these  exports  was  $230,000,000,  while  the  quantity  of 
shipping  leaving  our  ports  amounted  to  little  less  than  seven  mil- 
lions of  tons  —  the  increase  in  the  former,  in  twenty  years,  having 
been  but  150  percent.,  while  that  of  the  latter  had  been  little  short 
of  350  per  cent. 

If  there  is,  Mr.  President,  any  single  proposition  in  social 
science,  that  cannot  be  disputed,  it  is,  that  wealth,  civilization, 
and  power,  increase  in  the  ratio  of  the  diminution  of  the  machinery 
required  for  performing  the  work  of  transportation.  On  the  turn- 
pike, a  single  horse  performs  the  work,  that  before  had  been  done 
by  two  ;  and,  on  the  railroad,  a  single  car  transports  as  great  a 
weight  as,  at  first,  had  been  done  by  hundreds  of  horses  and  men, 
carts  and  wagons.  With  every  movement  in  that  direction,  land 
becomes  more  valuable,  and  man  becomes  more  free.  With  each 
and  every  one  in  the  opposite  direction,  the  value  of  land  declines, 
and  man  becomes  more  and  more  enslaved. 

The  first  and  heaviest  tax,  Mr.  President,  to  be  paid  by  land 
and  labor  is  that  of  transportation ;  and  it  is  the  only  one,  to 
which  the  claims  of  the  State  itself  are  forced  to  yield  precedence. 
Increasing  in  geometrical  proportion,  as  the  distance  from  market 
increases  arithmetically,  therefore  it  is,  that  agreeably  to  tables 


100  LETTERS   TO   THE 

recently  published,  corn  that  would  produce  at  market  $24.75  per 
ton,  is  worth  nothing,  at  a  distance  of  only  a  hundred  and  sixty 
miles,  when  the  communication  is  by  means  of  the  ordinary  wagon 
road  —  the  cost  of  transportation  being  equal  to  the  selling  price. 
By  railroad,  under  ordinary  circumstances,  that  cost  is  but  $2.40 — . 
leaving  to  the  farmer  $22.35,  as  the  amount  of  tax  saved  to  him 
by  the  construction  of  the  road ;  and  if  we  now  take  the  product 
of  an  acre  of  land,  as  averaging  a  ton,  the  saving  is  equal  to  inte- 
rest, at  six  per  cent.,  on  $370  an  acre.  Assuming  the  product 
of  an  acre  of  wheat  to  be  twenty  bushels,  the  saving  is  equal  to 
the  interest  on  $200  ;  but,  if  we  take  the  more  bulky  products  — 
hay,  potatoes,  and  turnips  —  it  will  be  found  to  amount  to  thrice 
that  sum.  Hence  it  is,  that  an  acre  of  land,  near  London,  sells 
for  thousands  of  dollars,  while  one  of  exactly  equal  quality  may 
be  purchased  in  Iowa,  or  Wisconsin,  for  little  more  than  a  single 
dollar.  The  owner  of  the  first  enjoys  the  vast  advantage  of  the 
endless  motion  of  its  products  —  taking  from  it  several  crops  in 
the  year,  and  returning  to  it,  at  once,  a  quantity  of  manure  equal 
to  all  he  had  abstracted ;  and  thus  improving  his  land  from  year 
to  year.  He  is  making  a  machine ;  whereas,  his  western  compe- 
titor, forced  to  lose  the  manure,  is  destroying  one.  Having  no 
transportation  to  pay,  the  former  can  raise  those  things  of  which 
the  earth  yields  largely — as  potatoes,  carrots,  or  turnips;  or 
those  whose  delicate  character  forbids  that  they  should  be  carried 
to  distant  markets ;  and  thus  does  he  obtain  a  large  reward  for 
that  continuous  application  of  his  faculties,  and  of  his  land,  which 
results  from  the  power  of  combination  with  his  fellow-men. 

In  the  case  of  the  latter,  all  is  widely  different.  Having  heavy 
transportation  to  pay,  he  cannot  raise  potatoes,  turnips,  or  hay, 
because  of  them,  the  earth  yields  by  tons ;  as  a  consequence  of 
which,  they  would  be  almost,  even  when  not  wholly,  absorbed  on 
the  road  to  market.  He  may  raise  wheat,  of  which  the  earth 
yields  by  bushels  ;  or  cotton,  of  which  it  yields  by  pounds  ;  but  if 
he  raise  even  Indian  corn,  he  must  manufacture  it  into  pork,  before 
the  cost  of  transportation  can  be  so  far  diminished,  as  to  enable 
him  to  obtain  a  proper  reward  for  labor.  Rotation  of  crops  being, 
therefore,  a  thing  unknown  to  him,  there  can  be  no  continuity  of 
action,  in  either  himself  or  his  land.  His  corn  occupies  the  latter 
but  a  part  of  the  year,  while  the  necessity  for  renovating  the  soil, 
by  means  of  fallows,  causes  a  large  portion  of  his  farm  to  remain 
altogether  idle — although  the  cost  of  maintaining  roads  and  fences 
is  precisely  the  same,  as  if  every  acre  were  fully  occupied. 

His  time,  too,  being  required  only  for  certain  portions  of  the 
year,  much  of  it  is  altogether  lost  —  as  is  that  of  his  wagon  and 
horses — the  consumption  of  which  latter  is  just  as  great  as  if  they 
were  always  at  work.  He,  and  they,  are  in  the  condition  of 
steam-engines,  constantly  fed  with  fuel,  while  the  engineer  as 


PRESIDENT   OF   THE   UNITED   STATES.  101 

regularly  wastes  the  steam  that  is  produced  —  a  proceeding  in- 
volving heavy  loss  of  capital.  Further  stoppages  of  employment 
—  both  for  his  land  and  for  himself — resulting  from  changes  in 
the  weather,  are  consequent  upon  this  limitation  in  the  variety  of 
things  that  may  be  cultivated.  His  crop,  perhaps,  requires  rain 
that  does  not  come,  and  his  corn,  or  cotton,  perishes  of  drought. 
Once  grown,  it  requires  light  and  heat,  but  in  their  place  come 
clouds  and  rain ;  and  it  and  he  are  nearly  ruined.  The  farmer 
near  London,  or  Paris,  is  in  the  condition  of  an  underwriter,  who 
has  a  thousand  risks,  some  of  which  are  maturing  every  day ; 
whereas,  the  distant  one  is  in  that  of  a  man  who  has  risked  his 
whole  fortune,  on  a  single  ship.  Having  made  the  voyage,  she 
arrives  at  the  entrance  of  her  destined  port,  when,  striking  on  a 
rock,  she  is  lost,  and  her  owner  is  ruined.  Precisely  such  is  the 
condition  of  the  farmer  who  —  having  his  all  at  risk  on  his  single 
crop  —  sees  it  destroyed  by  blight,  or  mildew,  almost  at  the  mo- 
ment when  he  had  expected  to  make  his  harvest.  With  isolated 
men,  all  pursuits  are  extra-hazardous ;  but  as  they  are  enabled 
to  approach  each  other,  and  combine  their  efforts,  the  risks  dimin- 
ish, until  they  almost  altogether  disappear.  Combination  of  ac- 
tion thus  makes  of  society,  a  general  insurance  office,  by  help  of 
which,  each  and  all  of  its  members  are  enabled  to  secure  them- 
selves, against  almost  every  imaginable  risk. 

Great,  however,  Mr.  President,  as-  are  these  differences,  they 
sink  almost  into  insignificance,  compared  with  that  which  exists, 
in  reference  to  the  maintenance  of  the  powers  of  the  land.  The 
farmer  distant  from  market  is  always  selling  the  soil,  which  con- 
stitutes his  capital ;  whereas,  the  one  near  London,  not  only  re- 
turns to  his  land,  the  refuse  of  its  products,  but  adds  thereto,  the 
manure  resulting  from  the  consumption  of  the  vast  amount  of 
wheat  brought  from  Russia  and  America  —  of  cotton  brought 
from  Carolina  and  India  —  of  sugar,  coffee,  rice,  and  other  com- 
modities, yielded  by  the  tropics  —  of  lumber  and  of  wool,  the  pro- 
ducts of  Canada  and  Australia — not  only  maintaining  the  powers 
of  his  land,  but  increasing  them  from  year  to  year. 

The  more  perfect  the  power  of  combination,  the  greater  is  the 
yield  of  the  land  ;  the  higher  are  the  prices  of  the  rude  products 
of  the  soil ;  the  smaller  is  the  bulk  of  the  commodities  to  be  trans- 
ported ;  and  the  larger  are  the  proportions  borne  by  their  value 
to  the  machinery  required  for  their  transportation.  That,  Mr. 
President,  is  the  road  towards  civilization,  but  it  is,  also,  the  very 
opposite  of  the  road  that  we  ourselves  are  travelling  —  the  quan- 
tity of  machinery  required  for  the  work  of  transportation,  increas- 
ing with  a  rapidity  far  greater  than  that  which  marks  the  growth 
of  values.  This  latter  being  the  certain  road  towards  barbarism, 
we  need  look  but  little  further  for  the  causes  of  the  decline  in 
morals,  wealth,  and  power,  now  so  rapidly  in  progress  throughout 
the  Union. 


102  LETTERS  TO   THE 

The  power  to  command  the  use  of  improved  machinery,  grows 
with  the  growth  in  value  of  the  things  requiring  to  be  transported 

the  farmer  whose  proximity  to  the  mill  enables  him  to  send  his 

grain  to  market  in  the  form  of  flour,  being  far  more  able  to  con- 
tribute to  the  improvement  of  roads,  than  his  fellow-farmer  who 
is  forced  to  send  it  in  that  of  wheat.  It  diminishes  as  the  things 
to  be  transported  decline  in  value,  and  hence  the  weakness  of 
countries  like  Portugal,  Turkey,  and  India,  that  are  becoming 
more  and  more  dependent  on  distant  markets.  It  diminishes 
with  us,  and  hence  it  is  that  our  dependence  on  foreign 
countries,  even  for  efficient  means  of  transportation,  so  rapidly 
increases. 

More  than  twenty  years  have  now  elapsed,  since  the  arrival  of 
the  Great  Western  steamer,  and  the  establishment  of  the  fact,  that 
we  could  avail  ourselves  of  the  power  of  steam,  for  the  passage 
of  the  broad  Atlantic.  For  nearly  all  that  time,  we  have  been 
struggling  to  obtain  steam  communication,  by  means  of  American 
ships,  with  Europe  —  the  government  aiding  in  the  effort,  to  the 
extent  of  many  millions.  What,  however,  has  been  the  result  of 
all  our  efforts  ?  Ship  after  ship  has  been  lost,  until  confidence  in 
American  steamers  has  almost  disappeared,  and  with  it,  the  lines 
of  steamers.  The  Collins  line,  as  it  still  is  called,  now  dispatches 
a  single  ship  per  month,  and  that,  too,  chiefly  owned  in  Europe. 
The  Havre  line  dispatches  a  monthly  ship.  The  Bremen  line  has 
wholly  disappeared.  Mr.  Yanderbilt  has  yet  three  ships  engaged 
in  the  European  trade,  but  the  recent  accident  to  one  of  them  can 
scarcely  fail  to  be  felt  injuriously  by  all  —  annihilating  the  little 
confidence  that  previously  had  existed. — The  day  is  fast  approach- 
ing, Mr.  President,  when  no  single  steamer  carrying  the  American 
flag,  will  float  upon  the  ocean,  except  government  ships,  and  the 
very  few  private  ones  engaged  in  the  coasting  trade,  in  which 
foreign  competition  is  wholly  interdicted.  Such  being  the  facts, 
and  such  the  prospects,  is  it  probable,  that  we  shall  long  main- 
tain that  superiority  on  the  ocean,  which  so  certainly  existed  at 
the  time  when  the  general  government  entered  upon  the  career 
of  centralization  ?  It  would  seem  not.  Beaten  in  agriculture, 
and  beaten  in  manufactures,  we  are  likely  to  be  even  yet  more 
thoroughly  distanced  in  regard  to  ships  ;  and  for  the  reason,  that 
our  policy  tends  steadily  towards  lessening  the  value  of  the  com- 
modities seeking  to  be  transported. 

The  French  policy  —  looking,  as  it  does,  to  the  emancipation 
of  land  and  labor  from  the  tax  of  transportation  —  is  directly  the 
reverse  of  ours.  We  tax  ourselves  for  the  maintenance  of  millions 
of  tons  of  shipping,  required  for  the  transport  of  merchandise  to 
be  given  to  France,  in  exchange  for  millions  upon  millions  of  tons 
of  food  and  other  commodities,  so  reduced  in  bulk,  that  their 
weight,  in  tons,  is  counted  by  thousands.  JFreed,  by  that  reduc- 


PRESIDENT   OF   THE    UNITED    STATES.  103 

tion,  from  all  the  cost  of  transportation,  France  is  enabled  to  in- 
voke the  aid  of  steam,  and  to  such  extent,  too,  that  the  arrivals 
of  her  own  steamers,  in  her  own  ports,  amounted,  in  1856,  to  no 
less  than  8,000  tons  per  week;  and  more  than  four  hundred  thou- 
sand, in  the  year. 

France,  Mr.  President,  is  carrying  out  your  own  most  excel- 
lent views  in  regard  to  commercial  policy  —  laying  a  broad  foun- 
dation of  domestic  commerce,  as  a  means  of  obtaining  the  largest 
power  of  intercourse  with  the  outer  world.  We,  on  the  contrary, 
are  destroying  the  domestic  commerce,  in  the  vain  hope  of  thereby 
building  up  a  great  foreign  one.  Why  have  we  no  steamers  run- 
ning to  Rio,  to  Buenos  Ayres,  to  Montevideo,  to  Valparaiso,  to 
Lima,  or  Australia  ?  Because  we  have  little  to  sell,  except  those 
rude  products  of  the  earth,  which  the  people  of  Brazil,  or  Chili,  do 
not  need  to  buy.  Before  they  can  do  so,  those  commodities  must 
pass  through  the  looms  of  Manchester  and  Lyons,  and  hence  it 
is,  that  nearly  all  our  intercourse  with  the  world  is  burthened 
with  costs  of  transportation  so  enormous,  that  our  farmers  are 
generally  poor,  although  themselves  the  owners  of  the  land.  In 
search  of  trade,  we  fit  out  expeditions  against  Japan  —  involve 
ourselves  in  disputes  with  Paraguay  and  Buenos  Ayres  —  explore 
African  and  South  American  rivers  —  and  maintain  an  enormous 
diplomatic  establishment  throughout  this  continent; and  yet,  have 
scarcely  any  thing  to  sell,  except  to  the  people  of  France  and 
England. 

What  we  need,  Mr.  President,  is  that  real  free  trade,  which 
consists  in  maintaining  direct  intercourse  with  the  world  at  large ; 
but  that  we  cannot  have,  so  long  as  we  shall  continue  to  export 
our  commodities  in  their  rudest  state.  The  farmer  who  has  but 
one  mill  at  which  to  grind  his  grain,  has  no  freedom  of  trade. 
The  miller  and  the  baker  have  it  —  they  being  free  to  sell  to  whom 
they  please.  Our  farmers  and  planters  have  none  of  it  —  being 
compelled  to  send  their  products  to  the  distant  mills,  before  they 
and  their  neighbors  can  make  exchanges,  even  among  themselves. 
They  need,  as  you  so  well  have  seen,  that  real  free  trade  which 
would  enable  the  planter  of  Mississippi  to  exchange  with  the 
farmer  of  Illinois  —  receiving  cloth,  lead,  and  iron,  in  exchange 
for  sugar  and  cotton.  "That,"  as  you  have  said,  "is  the  free 
trade  we  want."  That  we  may  have  it,  we  must  diversify  the 
employments  of  our  people ;  .we  must  enable  them  to  combine 
their  efforts;  we  must  relieve  our  farmers  from  a  tax  of  trans- 
portation, greater  than  is  required  for  maintaining,  ten  times 
over,  all  the  armies  of  Europe ;  we  must  enable  ourselves  to 
pay  our  debts  to  the  land,  and  thus  obtain  a  real  agriculture,  in 
place  of  the  system  of  spoliation  that  now  exists  ;  we  must 
establish  a  balance  of  trade  in  our  favor,  payable  in  the  precious 
metals,  and  thus  enable  ourselves  to  maintain  the  real  specie  cur- 


104  LETTERS   TO   THE 

rency,  that  you  so  much  desire  to  see  established.  —  Those  things 
done,  we  shall  be  able  to  command  the  use  of  machinery  of 
exchange  of  the  highest  order  —  fleets  of  steamers  taking  the  place 
of  sailing  ships,  and  the  use  of  money  becoming  obtainable,  with- 
out the  payment  of  a  higher  interest  than  is  paid  in  any  other 
country  of  the  world,  claiming  to  be  held  as  civilized.  Such, 
Mr.  President,  is  the  real  road  to  wealth  and  power ;  but,  as  you 
have  seen,  all  our  movements  are  in  the  reverse  direction. 
Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  February  $th,  1858. 


PRESIDENT   OF  THE   UNITED   STATES.  105 


LETTER    NINETEENTH. 

"NOTHING,"  says  Hume,  " is  esteemed  a  more  certain  sign  of 
the  flourishing  condition  of  any  nation,  than  the  lowness  of  inte- 
rest"—  or,  in  other  words,  the  moderation  of  the  charge  for  the 
use  of  that  greatest  of  all  the  instruments  used  by  man,  called 
money.  It  is,  Mr.  President,  an  evidence  of  the  existence  of  that 
feeling  of  security,  which  always  attends  advance  of  civilization — 
the  rate  of  interest  being  very  high  in  all  countries  in  which  pro- 
perty is  insecure,  and  declining  steadily  as  we  pass  outward,  to- 
wards those  in  which  men  are  more  and  more  enabled  to  combine 
their  efforts  for  the  promotion  of  the  common  good  —  in  which 
population  and  wealth  increase  —  in  which  the  land  becomes  more 
productive  —  in  which  the  prices  of  raw  materials  tend  to  rise,  and 
those  of  finished  commodities  to  fall — and  in  which,  consequently, 
the  power  to  purchase  the  precious  metals  augments  from  year  to 
year. 

That  power,  and  the  tendency  to  decline  in  the  rate  of  interest, 
exist  in  every  community,  in  the  precise  ratio  of  the  activity  of  the 
circulation  of  labor  and  its  products.  The  more  perfect  the  ex- 
isting supply  of  money,  and  the  more  it  is  utilized,  the  more  rapid 
is  the  circulation,  and  the  greater  the  tendency  to  increase  in  the 
ability  for  further  purchases.  The  less  the  supply,  and  the  less  it 
is  utilized,  the  slower  is  the  societary  circulation,  and  the  greater 
is  the  tendency  to  lose  the  money  that  had  before  been  purchased. 
In  the  one  case,  labor  obtains  power  over  capital,  and  the  rate  of 
interest  falls.  In  the  other  —  capital  obtaining  increased  control 
over  labor  —  the  rate  of  interest  rises.  The  first  of  these  classes 
of  phenomena  obtains  in  all  those  countries,  that  follow  in  the  lead 
of  France — importing  raw  materials,  and  exporting  the  products 
of  their  soil  in  the  most  perfect  form.  The  second  is  found  in  all 
of  those,  that  follow  in  the  direction  now  indicated  by  England  — 
exporting  the  rude  products  of  the  soil,  and  re-importing  them 
again  in  a  finished  state ;  as  is  the  case  with  Ireland,  India,  Ja- 
maica, Portugal,  Turkey,  Mexico,  and  all  the  States  of  Southern 
America. 

In  further  proof  of  this,  we  may  take  the  various  phenomena 
presented  by  ourselves,  as  our  policy  has  changed  from  time 
to  time,  within  the  last  half  century.  In  the  period  of  free 
trade  that  followed  the  close  of  the  great  European  war,  circula- 
tion almost  ceased  —  labor  was  everywhere  wasted  —  production 
was  small  —  and  money  was  scarce  and  high.  In  that  which  fol- 
lowed the  passage  of  the  highly  protective  act  of  1828,  everything 
was  different  —  the  circulation  having  then  been  rapid,  labor  in 
demand,  production  great,  and  money  low  in  price.  The  scene 


106  LETTERS  TO   THE 

being  once  more  changed,  production  declined,  while  money  rose 
with  great  rapidity  —  becoming,  at  length,  so  entirely  unattain- 
able, that  banks  suspended,  States  defaulted,  and  the  Federal 
government  was  wholly  bankrupt.  The  protective  policy  being 
again  adopted,  production  increased  with  great  rapidity,  while 
the  rate  of  interest  fell.  It  has  now  been  high  for  years,  and  for 
the  reason,  that  production  has  been  steadily  and  regularly  de- 
clining in  its  ratio  to  the  population.  In  proof  of  this,  we  have, 
Mr.  President,  the  fact,  that  the  consumption  of  food,  cloth, 
and  iron,  bears  now  a  smaller  proportion  to  the  numbers  of  the 
people,  than  it  did  ten  years  since.  The  facts  of  the  past  three 
years  thus  correspond,  exactly,  with  those  observed  in  those 
that  followed  1836.  Interest  was  then  high — foreign  loans  were 
large  —  and  emigration  to  the  West  was  great.  Speculation  was 
then  rife,  as  it  so  recently  has  been  ;  but  daily  diminution  of  pro- 
duction laid  the  foundation  of  the  distress  and  ruin,  that  became 
so  universal  in  1842. 

That  real  prosperity  is  totally  inconsistent  with  an  advancing 
rate  of  interest,  is  a  fact  whose  truth  is  proved  by  every  chapter 
in  the  world's  history.  In  that  direction,  lie  centralization  and 
slavery  —  increase  in  the  charge  for  the  use  of  money  being  evi- 
dence of  growth  in  the  power  of  the  accumulations  of  the  past, 
over  the  labor  of  the  present  —  of  capital  over  labor.  In  proof 
of  this,  we  have  the  fact,  that  throughout  an  important  portion 
of  the  Union,  the  pro-slavery  feeling  keeps  steady  pace  with  the 
exhaustion  of  the  land,  consequent  upon  the  export  of  its  products 
in  their  rudest  shapes  —  with  the  export  of  the  precious  metals  — 
and  with  the  increase  in  the  price  of  money. 

Money  is  often  spoken  of  as  capital ;  and  thus  we  are  told, 
that  interest  is  high,  because  "  capital  is  scarce."  There  would, 
however,  be  as  much  propriety  in  saying,  that  rents,  tolls,  or 
freights,  were  high,  because  capital  was  scarce.  Interest  is  always 
high,  when  money,  from  whatsoever  cause,  is  scarce  ;  and  the  high 
price  then  paid  for  its  use,  causes  a  deduction  from  the  profits  of 
the  trader,  from  the.  rents  of  houses,  and  from  the  freights  of 
ships.  The  owner  of  money  then  profits  at  the  expense  of  all 
other  capitalists.  Interest  is  the  compensation  paid  for  the  use 
of  the  instrument  called  money,  and  for  that  alone.  In  countries 
in  which  it  is  high,  the  rate  of  profit  is  necessarily  so,  because 
the  charge  for  the  use  of  money  enters  so  largely  into  the  trader's 
calculations. 

The  high  profits  of  our  Western  States  are  said  to  be  the  cause 
of  the  high  interest  that  is  paid ;  but  here,  as  everywhere,  modern 
political  economy  substitutes  effect  for  cause.  Interest  there  is 
high,  because  money — the  thing  for  which,  alone,  interest  is  paid — 
is  scarce  ;  and  because  its  scarcity  enables  the  men  who  can  com- 
mand the  use  of  machinery  of  exchange,  to  obtain  large  profits, 
by  means  of  standing  between  the  producer  who  needs  advances 


PRESIDENT   OF  THE   UNITED   STATES.  107 

on  his  corn,  and  the  consumer  who  requires  credit  on  his  cloth 
and  iron.  Wherever  it  is  scarce,  circulation  is  sluggish ;  the 
waste  of  the  physical  and  mental  power  is  great ;  and  the  man 
who  can  then  command  the  use  of  that  indispensable  machinery, 
becomes  even  more  the  master  of  him  who  desires  to  use  it,  than 
the  transporter  does,  when  crops  are  large,  and  ships  are  scarce. 

Daily  experience,  Mr.  President,  teaches  the  farmer,  that  when 
money  —  the  machine  by  means  of  which  exchanges  are  made 
from  hand  to  hand  —  circulates  freely,  he  becomes  more  prosper- 
ous from  day  to  day ;  whereas,  when  it  is  scarce,  and  circulates 
slowly,  his  prosperity  disappears.  It  is  not  capital  that  is  needed, 
but  money  —  the  machine  by  help  of  which  the  products  of  labor 
and  capital  are  kept  in  motion,  and  without  which  they  can  move 
only  in  the  fashion  of  primitive  times,  when  skins  were  traded  for 
knives  and  cloth.  Our  actual  capital,  h»houses,  lands,  factories, 
furnaces,  mines,  ships,  roads,  canals,  and  other  similar  property, 
has,  in  the  last  ten  years,  been  increased  by  the  application  of 
labor  to  the  extent  of  thousands  of  millions  of  dollars ; ,  and  yet, 
we  everywhere  see  roads  half  finished,  and  unlikely  soon  to  be 
completed,  although  laborers  are  seeking  employment ;  mills 
stopped  for  want  of  demand  for  their  products  ;  laborers  unable 
to  sell  their  labor ;  and  men  of  business  compelled  to  curtail  their 
operations,  because  of  the  difficulty  experienced,  in  obtaining  the 
means  with  which  to  pay  their  debts.  Why  is  this  so  ?  Not, 
certainly,  because  of  any  diminution  of  capital,  for  that  is  greater 
than  it  has  ever  been. 

Were  it  possible  now  to  announce,  that,  by  reason  of  any  change 
of  policy,  the  export  of  gold  would  be  stopped,  and  that  the  quan- 
tity in  the  country  would  steadily  be  increased,  by  retaining  here  the 
produce  of  California,  money  would  forthwith  become  abundant  and 
cheap — circulation  would  recommence — and  prosperity  would  reign 
throughout  the  land  ;  and  yet,  the  difference  in  the  ensuing  year, 
would  not  amount  to  a  quarter  of  one  per  cent,  of  the  value  of 
the  land  and  labor  of  the  country.  Capital  would  be  increased 
by  a  portion  so  minute  as  scarcely  to  be  discernible,  and  yet  the 
money  value  —  the  value  at  which  it  would  be  exchanged — would 
be  augmented  by  thousands  of  millions.  At  present,  all  is  stag- 
nant, and  there  is  little  force.  Then  —  all  becoming  life  and  mo- 
tion—  the  force  exerted  would  be  great. 

It  is  not,  however,  Mr.  President,  in  the  quantity  of  money 
held  by  a  community,  that  we  are  to  find  the  test  of  its  prosperity, 
or  the  index  to  the  rate  of  interest ;  but  in  the  rapidity  with  which 
it  circulates.  Steadiness  and  regularity  in  the  motion  of  society 
are  requisite  for  the  production  of  confidence,  and  increase  of  mo- 
tion and  force  results  from  confidence.  The  gold  held  by  the 
banks,  the  people,  and  the  government,  is  said  to  exceed  by  more 
than  $150,000,000  what  was  held  but  a  few  years  since;  but  — 
there  being  no  regularity  in  the  societary  movement  —  credit  is 


108  LETTERS   TO   THE 

ranch  impaired.  As  a  consequence  of  this  it  is,  that  the  circula- 
tion is  sluggish,  and  that  the  rate  of  interest  has,  for  years,  been 
so  very  high,  as  greatly  to  limit  the  disposition  to  engage  in  any 
operations  requiring  time  for  their  completion.  The  moneyed 
capitalist  profits  by  this  —  obtaining  treble  or  quadruple  the  usual 
rate  of  interest ;  but  the  miner,  the  founder,  the  cotton-spinner, 
and  the  cloth-maker,  have  been,  and  are  being,  ruined  by  it. 

The  existence  of  credit  is  an  evidence  of  the  existence  of  that 
confidence  of  man  in  his  fellow-man,  which  always  attends  the 
growth  of  real  civilization.  How  it  tends  to  stimulate  the  socie- 
tary  motion,  and  thus  to  augment  the  productive  power,  is  so  well 
exhibited  by  a  recent  French  economist,  that  I  am  induced,  Mr. 
President,  to  present  for  your  consideration,  the  following  extract 
from  his  work  :  — 

"On  one  side,"  say£  M.  Coquelin,  "we  see  a  machinist,  a 
blacksmith,  and  a  wheelwright,  whose  shops  are  closed,  not  per- 
haps because  of  any  want  of  raw  materials,  but  because  of  absence 
of  demand  for  their  products.  Elsewhere,  are  manufacturers  in 
want  of  machinery,  and  farmers  in  need  of  agricultural  implements. 
Why,  now,  is  it  that  these  latter  do  not  give  to  the  former,  the 
orders  for  want  of  which  they  continue  idle  ?  Because  these  latter 
must  be  paid  in  money,  which  money  the  others  cannot  at  the 
moment  pay  ;  and  yet  they  have,  in  shops  or  barns,  abundance 
of  commodities  that  they  desire  to  sell,  and  by  the  possession  of 
which  many  of  the  neighboring  people  would  be  greatly  served. 
Why  do  they  not  exchange?  Because  —  direct  exchange  being 
impossible  —  they  must  commence  by  selling ;  and,  as  they,  in 
their-turn,  must  demand  money,  they  can  find  no  purchasers. 
Here  we  have  a  suspension  of  labor  on  both  sides,  and  it  is  in 
cases  like  this,  that  production  is  languid  and  society  vegetates, 
although  surrounded  by  all  the  elements  of  life,  motion,  and 
prosperity. 

"Means  might,  however,  be  found  for  removing  the  difficulty 
that  thus  exists.  If  the  machinist,  the  blacksmith,  and  the  wheel- 
wright, refuse  to  deliver  their  products,  except  for  ready  money, 
it  is  not  because  of  any  doubt  they  entertain  of  the  future  solvency 
of  the  farmer,  or  the  manufacturer ;  but  because  it  is  inconvenient 
to  them  to  make  credit  sales  that  would  diminish  their  active 
capital,  and  perhaps  disable  them  from  continuing  their  opera- 
tions. Let  each  one,  then,  in  delivering  his  articles,  as  he  has 
confidence  in  the  future  ability  of  those  who  now  demand  them, 
require  only,  in  place  of  money,  a  note  that,  in  his  turn,  he  can 
use,  with  those  who  furnish  him.  On  this  condition,  circulation 
will  be  re-established,  and  labor  will  be  resumed.  True,  but  we 
must  first  be  sure  that  these  notes,  when  accepted,  will  be  received 
elsewhere,  as,  otherwise,  it  becomes  at  once  a  simple  sale  on  credit. 
This  certainty,  however,  cannot  be  obtained,  and  therefore  they 
refuse  the  notes ;  not  because  of  any  suspicion  of  their  ultimate 


PRESIDENT  OF  THE   UNITED   STATES.  109 

value,  but  because  of  doubts  of  the  possibility  of  disposing  of 
them.  At  this  moment  a  bank  intervenes,  and  says  : —  'You, 
machinist,  deliver  your  machinery ;  you,  blacksmith,  your  instru- 
ments ;  you,  ploughman,  your  raw  materials ;  you,  manufacturer, 
your  manufactures :  accept,  with  confidence,  notes  payable  at  a 
future  time,  provided  you  have  full  belief  in  the  goodness  of 
those  who  will  thus  become  your  debtors.  I  will  take  charge  of 
all  those  notes,  and  hold  them  until  they  shall  become  due  —  giv- 
ing you  in  exchange  other  notes,  issued  by  me,  that  you  will  be 
certain  to  find  of  universal  acceptation.'  Forthwith,  all  difficulty 
is  at  an  end  —  sales  being  made,  goods  circulating,  and  produc- 
tion becoming  animated.  There  are  no  longer  raw  materials,  in- 
struments, nor  products  of  any  description,  remaining,  even  for  a 
moment,  unemployed." 

There  is,  here,  Mr.  President,  no  change  in  the  quantity  of  capital 
owned  by  the  community,  and  yet,  its  members  are  seen  passing 
from  a  state  of  apathy  and  idleness  to  one  of  activity  and  produc- 
tiveness—  enabling  every  one  to  sell  his  labor  —  receiving  in  ex- 
change the  commodities  required  for  the  consumption  of  wives  and 
families,  who  before  were  like  to  suffer  for  want  of  the  common 
necessaries  of  life.  What,  however,  is  it  that  gives  value  to  these 
notes,  and  why  is  it  that  they  circulate  so  much  more  freely  than 
those  of  the  blacksmith  and  the  farmer  ?  Because  there  exists  in 
the  community,  a  confidence  that  behind  them  stands  a  pile  of 
money  sufficient  to  redeem  each  and  every  one  of  them,  when- 
ever, and  however,  presented.  Without  the  existence  of  that  be- 
lief, they  would  not  circulate,  as  would  soon  be  seen,  were  there 
established  a  drain  of  gold  —  producing  a  steady  diminution  of 
the  quantity  in  the  possession  of  the  bank,  until  at  length  even  a 
single  note  failed  to  be  paid  on  presentation.  From  that  moment 
their  circulation  would  be  stopped ;  the  suspension  of  movement 
would  again  take  place  —  the  blacksmith,  the  machinist,  and  the 
wheelwright,  again  mourning  over  instruments  that  they  would 
gladly  exchange  for  food  and  cloth ;  and  the  farmer  and  the  manu- 
facturer suffering  from  the  difficulty  of  obtaining  machinery,  for  the 
better  production  of  food  and  clothing.  Money  is  to  society  what 
fuel  is  to  the  locomotive,  and  food  to  the  man  —  the  cause  of 
motion,  whence  results  power.  Withdraw  the  fuel,  and  the  ele- 
ments of  which  water  is  composed  cease  to  move,  and  the  machine 
becomes  stationary.  Withdrawal  of  the  food  from  man,  is  followed 
by  paralysis  and  death ;  and  such,  precisely,  is  the  effect  of  failure 
of  the  necessary  supply  of  money — the  producer  of  motion,  among 
the  elements  of  which  society  is  composed. 

When,  therefore,  the  farmer  complains  that  money  is  scarce, 
and  the  laborer,  mechanic,  and  manufacturer,  repeat  the  complaint, 
they  are  right.  It  is  money  that  is  needed,  and  their  common 
sense  does  not  in  any  manner  deceive  them.  In  every  country  of 
the  world,  pleasant  feelings  are  excited  by  hearing  of  the  incom- 


110  LETTERS   TO   THE 

ing  of  gold  and  silver,  because  therewith  are  associated  ideas 
of  activity  and  energy ;  while,  on  the  contrary,  fear  and  sorrow 
are  excited  by  their  outgoing  —  there  being  therewith  associated 
ideas  of  dnlness,  inactivity,  suffering,  and  death.  The  former, 
Mr.  President,  have  been  the  feelings  prevalent  throughout  this 
country  in  the  closing  years  of  the  several  trials  we  have  made  of 
the  protective  policy  —  to  wit,  in  1816,  1834,  and  1846  —  the 
precious  metals  having  then  flowed  in,  confidence  having  been 
mutual,  and  money  having  been  readily  obtainable  at  the  legal 
rate  of  interest.  The  latter  feelings  have  prevailed  in  the  closing 
years  of  every  trial  of  the  free-trade  system  —  those  metals  having 
then  flowed  out — confidence  having  disappeared —  and  the  charge 
for  the  use  of  money  having  ranged  from  12  to  50  per  cent. 

The  cause  of  all  the  differences  then  observed,  is  to  be  found 
in  the  fact,  that  in  the  first,  the  policy  of  the  central  government 
has  tended  to  promote  the  growth  of  combination  among  our  peo- 
ple— to  increase  the  facilities  of  exchange  —  and  to  augment  pro- 
duction ;  whereas,  in  the  other,  it  has  tended  to  destroy  the  power 
of  association  —  to  lessen  the  facilities  of  intercourse  —  and  to 
diminish  the  productive  power.  In  the  one,  we  have  been  enabled 
to  obtain  improved  machinery  —  passing  from  the  turnpike  to  the 
railroad  —  from  the  sailing  ship  to  the  steamer  —  from  the  hand- 
loom  to  the  power-loom  —  and  from  irredeemable  paper-money  to 
a  real  specie  circulation.  In  the  other,  our  machinery  has  steadily 
deteriorated  —  railroads  going  to  ruin  —  steamers  diminishing  in 
number  —  the  spindle  and  the  loom  giving  place  to  the  wagon  — 
and  specie  disappearing,  to  be  replaced  by  the  inconvertible  notes 
of  cities,  counties,  and  banks,  and  of  the  national  treasury  itself. 

Diminution  in  the  rate  of  interest,  Mr.  President,  is  an  evidence 
of  advancing  civilization.  With  us,  the  rate  increases,  and  there- 
fore it  is,  that  each  successive  year  brings  with  it  new  combinations 
for  procuring  a  repeal  of  the  laws  limiting  the  rate  at  which 
money  may  be  lent.  The  cause  of  all  this,  is  to  be  found  in  the 
fact,  that  the  policy  of  the  central  government  looks  steadily  to- 
wards an  increase  in  the  power  of  the  trader,  and  in  the  tax  of 
transportation  —  augmenting,  as  it  does,  the  quantity  of  shipping 
required  for  transporting  any  given  value  of  our  products,  and 
thus  diminishing  the  power  to  purchase  that  highest  and  best  of 
all  the  machinery  of  exchange,  called  money.  Under  a  different 
system,  that  power  would  steadily  increase,  and  usury  laws  would 
gradually  die  out  —  the  standard  rate  of  interest  falling  below  the 
legal  one.  All  the  efforts  for  the  repeal  of  those  laws,  are  to  be 
regarded  only  as  furnishing  additional  evidence  of  the  growing 
power  of  capital  over  labor —  always  a  characteristic  of  declining 
civilization. 

Our  present  position,  Mr.  President,  is  precisely  similar  to  that 
described  in  the  above  extract  from  M.  Goquelin's  excellent  little 
book.  With  a  large  supply  of  lands,  houses,  corn,  cotton,  and 


PRESIDENT  OF   THE   UNITED   STATES.  Ill 

other  commodities  and  things,  we  have  little  commerce  among 
ourselves.  Corn  abounds,  but  the  laborer  perishes  for  want  of 
food.  Houses  abound,  but  wives  and  children  wander  through 
our  streets  for  want  of  shelter.  Ships  abound,  but  their  owners  are 
mined  for  want  of  freights.  Coal  abounds,  and  yet  men,  women, 
and  children  perish  of  cpld.  Commerce,  so  far  as  regards  the 
sale  of  labor,  has  almost  ceased  to  exist.  Why  is  it  so  ?  Because 
money  has  ceased  to  circulate,  and  in  the  absence  of  that  circula- 
tion, the  societary  movement,  called  commerce,  can  have  no  exist- 
ence. Why  has  it  ceased  to  circulate  ?  Because  confidence  has 
wholly  disappeared.  Why  has  it  disappeared  ?  Let  us  inquire. 

History,  as  we  are  told,  is  philosophy  teaching  by  example. 
What,  then,  does  history  tell  us  ?  When  has  confidence  most 
prevailed  ?  Has  it  not  been  in  the  closing  years  of  the  three  pro- 
tective periods — those  periods  in  which  there  was  an  inward  flow 
of  the  precious  metals  ?  When  has  it  most  entirely  disappeared  ? 
Has  it  not  been  in  the  closing  years  of  the  three  free-trade  periods 
—  those  periods  in  which  gold  and  silver  flowed  outwards?  — 
When  has  the  price  of  money  been  most  regular  ?  Has  it  not 
been  in  the  protective  periods  ?  When  has  it  been  most  irregular  ? 
Has  it  not  been  in  the  free-trade  ones  ?  When  have  we  become 
rich  and  strong  ?  Has  it  not  been  in  the  protective  periods  ? 
When  have  we  become  gradually  poorer  and  weaker  —  ending 
with  general  bankruptcy  ?  Has  it  not  been  in  the  free-trade  pe- 
riods ?  When  has  labor  acquired  power  over  capital  ?  Has  it 
not  been  in  the  protective  periods  ?  When  has  capital  acquired 
power  over  labor  ?  Has  it  not  been  in  the  free-trade  periods  ? 
To  these  questions,  the  answer  must  be  in  the  affirmative  —  our 
tendency  in  the  one  having,  always,  been  towards  localization  and 
freedom,  and  in  the  other,  as  regularly,  towards  centralization  and 
slavery. 

Such,  Mr.  President,  having  been  the  law  of  the  past,  what  is 
to  be  that  of  the  future?  If  protection  has  given  us  wealth, 
strength,  credit,  and  power,  in  the  past,  must  it  not  do  the 
same  in  the  future  ?  If  the  system  called  free  trade  has  given  us 
poverty,  distrust,  and  weakness,  in  the  past,  can  it  do  otherwise  in 
the  future  ?  Assuredly  not,  and  for  the  reason,  that  it  looks  to 
the  exhaustion  of  the  soil,  the  impoverishment  of  the  farmer,  the 
increase  of  the  power  of  the  trader  in  goods  and  money,  the 
annihilation  of  the  power  to  obtain  the  machinery  required  for 
reducing  the  labors  of  production,  and  the  destruction  of  confi- 
dence of  man  in  his  fellow-men.  So  long  as  that  system  shall 
be  continued,  there  can  be  no  general  revival  of  confidence,  be- 
cause property  must,  and  will,  become  less  and  less  secure.  That 
it  may  be  revived,  it  is  needed  that  the  central  government  change 
its  system  —  abandoning  at  once,  and  for  ever,  the  idea  of  main- 
taining a  hard  money  currency  while  pursuing  a  policy  tending  to 
the  expulsion  of  the  precious  metals,  and,  that  of  building  up  a 


112  LETTERS  TO   THE 

great  foreign  commerce,  by  aid  of  measures  tending  to  destroy 
the  domestic  one. 

That  further  progress,  in  its  present  direction,  must  be  produc- 
tive of  effects  the  most  disastrous,  will  be  obvious  to  you,  Mr. 
President,  on  a  careful  study  of  the  facts  presented  for  considera- 
tion by  the  last  few  years.  With  a  larger  supply  of  the  precious 
metals  than  we  ever  before  possessed,  but  without  the  smallest 
confidence  in  the  duration  of  the  apparent  prosperity,  gold  has 
been  secreted  to  such  extent,  that  the  price  of  money  has  been  so 
high  as  to  have  proved  utterly  destructive  to  the  really  working- 
men  of  the  community  —  all  their  apparent  profits  having  been 
absorbed  by  the  payment  of  usurious  interest.  Mills,  factories, 
mines,  and  furnaces,  as  a  consequence,  have  been  closed,  to  the 
utter  ruin  of  their  owners.  Workmen,  of  all  descriptions,  have 
been  obliged  to  seek  in  the  West  the  food  denied  to  them  at  home. 
There  arrived,  they  have  found  the  public  lands  monopolized  by 
speculators,  to  whom  they  have  been  obliged  to  pay  double,  treble, 
or  quadruple  prices,  for  the  little  land  they  needed.  Thus  plun- 
dered at  the  outset  of  their  operations,  they  have  been  compelled 
to  borrow  money,  paying  for  its  use,  at  every  rate  from  20  to  70 
per  cent,  a  year.  The  bubble  having  burst,  they  find  themselves 
in  the  hands  of  their  usurious  creditors,  and  now  the  sheriff  will 
complete  the  work. 

The  whole  policy  of  the  central  government  tends,  thus,  to  the 
annihilation  of  the  really  useful  portion  of  society,  and  to  the  ag- 
grandizement of  traders  in  money,  in  land,  in  cloth  and  cotton,  in 
principles,  and  in  men ;  and,  as  a  necessary  consequence,  the  de- 
moralization of  society  becomes  more  complete  with  each  succes- 
sive year.  The  range  of  honest  employment  becoming  daily  more 
and  more  restricted,  men  are  driven,  by  sheer  necessity,  to  engage 
in  schemes  of  public  and  private  plunder,  from  which,  under  other 
circumstances,  they  would  shrink  back,  shuddering  at  their  very 
thought.  —  How  long,  Mr.  President,  can  such  a  state  of  things 
endure  ?  Is  it  possible,  under  such  a  course  of  operation,  to 
build  up  a  stable  system  ?  That  it  is  not,  is  proved  by  all  the 
facts  of  history.  A  change  must  come  in  the  policy  of  the  govern- 
ment, or  the  government  itself  will  undergo  a  change. 

The  commerce  that  you,  Mr.  President,  have  so  well  described, 
as  being  the  sort  of  free  trade  that  we  really  need,  is  all  that  is 
required  to  render  money  abundant  and  easily  obtainable  at  a 
moderate  interest,  with  larger  power  to  obtain  mills,  steamers, 
money,  and  all  other  machinery,  than  is  now  possessed  by  any 
other  community  of  the  world.  Give  the  people  but  thai  com- 
merce, and  confidence  will  be  at  once  restored. 
Yours,  very  respectfully, 

HENRY  C.  CAREY. 

Philadelphia,  February  12th,  1858. 


PRESIDENT   OF   THE    UNITED   STATES.  113 


LETTER    TWENTIETH. 

I 

THAT  the  rate  of  interest,  throughout  the  Union,  is  very  high, 
and  that  it  constitutes  a  serious  obstacle  to  the  extension  of  manu- 
factures, to  the  development  of  our  vast  treasures  of  coal,  iron, 
and  other  metals,  and  to  the  creation  of  a  domestic  market  for 
the  produce  of  the  soil,  are  facts,  Mr.  President,  that  cannot  be 
denied.  We  are,  however,  assured,  that  their  existence  is  conse- 
quent upon  the  deficiency  of  a  certain  something,  called  capital — 
that  time,  alone,  is  required  for  obtaining  the  necessary  supply — 
and  that,  then,  money  will  be  cheap,  and  manufactures  will  be 
established.  What,  however,  has  been  the  direction  in  which  we 
have  moved,  in  the  last  few  years  ?  Have  we  advanced,  or  retro- 
graded ?  Has  the  price  of  money  fallen  since  1846  ?  Has  it  not, 
on  the  contrary,  greatly  risen  ?  Is  capital  more  easily  obtainable, 
for  mining,  or  for  manufactures,  than  it  was,  ten  years  since  ? 
Has  not,  on  the  contrary,  the  capital  that  then  was  so  engaged, 
almost  entirely  disappeared  ?  Are  our  farmers  less  dependent  on 
the  distant  market,  than  they  were  in  1846  ?  Have  they  not,  on 
the  contrary,  become  greatly  more  dependent?  —  If,  then,  for  the 
last  twelve  years,  our  movement  has  been  retrograde,  is  it  pro- 
bable, Mr.  President,  that  further  continuance  in  the  line  of 
policy  to  which  that  effect  is  due,  will  change  the  movement  to 
a  forward  one  ?  Scarcely  so,  as  it  would  seem. 

Capital  abounds,  and  the  price  paid  for  the  use  of  the  instru- 
ment called  money,  is  low,  in  all  those  communities,  in  which  em- 
ployments have  been  diversified  ;  those,  in  which  the  consumer 
and  the  producer  have  taken  their  places  by  each  other's  side ; 
those,  in  which  the  tax  of  transportation  is  small ;  those,  in  which 
agriculture  is  becoming  a  science ;  those,  in  which  the  yield  of 
the  land  steadily  increases ;  those,  whose  raw  materials  steadily 
rise  in  price ;  those,  consequently,  whose  growing  wealth  enables 
them  to  increase  their  supplies  of  the  precious  metals,  as  is  the 
case  with  the  countries  of  Central  and  Western  Europe  —  those 
which  follow  in  the  lead  of  France. 

Capital  is  scarce,  and  interest  is  high,  in  all  those  countries 
which  are  dependent  upon  a  nearly  exclusive  agriculture ;  those 
whose  markets  are  distant ;  those  which  are  subject  to  heavy  tax 
for  transportation;  those  whose  agriculture  consists  in  robbing 
the  earth,  and  selling  the  soil ;  those,  the  yield  of  whose  land  de- 
creases ;  those,  whose  raw  materials  fall  in  price ;  those,  conse- 
quently, whose  poverty  forbids  increase  in  the  supply  of  the  pre- 
cious metals,  as  is  the  case  with  Ireland,  India,  Portugal,  Turkey, 
and  all  other  countries  which  follow  in  the  lead  of  England. 


114  LETTERS   TO   THIi 

Capital  being  scarce  among  these  latter,  they  are  constantly 
assured  that,  under  existing  circumstances,  it  is  absurd  for  them 
to  attempt  to  convert  their  corn  and  their  wool  into  cloth,  or  their 
coal  and  ore  into  iron.  It  is,  however,  manufactures  that  cause 
the  growth  of  capital  —  facilitating,  as  they  do,  the  development 
of  the  powers  of  THE  MAN,  and  thus  enabling  him  to  combine 
with  his  fellow-men,  for  economizing  the  power  resulting  from  the 
consumption  of  capital  in  the  form  of  food. 

Every  act  of  combined  action,  Mr.  President,  has  for  its  object, 
and  its  effect,  a  saving  of  human  effort,  which,  itself,  is  capital. 
Sometimes,  a  few  individuals  combine  to  drain  a  piece  of  land  ; 
at  others,  to  dig  a  well,  to  construct  a  mill,  or  to  open  a  mine ; 
all  of  which  require  capital ;  that  is  to  say,  the  investment  of  a 
certain  amount  of  labor,  upon  the  same  principle,  identically, 
that  the  farmer  ploughs  his  land,  and  sows  his  seed  —  calculating 
upon  having  it  returned,  with  interest  for  its  use.  When  Crusoe 
made  his  rope-ladder,  he  did  so  for  the  reason,  that  it  was  better 
for  him  at  once  to  expend  a  few  hours,  or,  in  other  words,  a  little 
capital,  than  to  waste,  throughout  the  year,  an  hour  a  day,  in 
climbing  the  rock  under  which  he  had  taken  up  his  abode.  All 
the  labor  thus  economized,  was  capital. 

"What,"  says  a  recent  French  economist  —  "What  is  the  ob- 
ject, what  the  result,  sought  to  be  obtained  by  every  advance  of 
capital,  for  whatsoever  purpose  ?  It  is,  everywhere  and  always, 
that  of  suppressing,  by  means  of  a  certain  quantity  of  labor  once 
performed,  a  certain  portion  of  current  labor  and  annual  ex- 
pense that  would  otherwise  re-appear  periodically,  and  for  an 
indefinite  period  of  time ;  it  is  to  exonerate,  at  the  cost  of  a 
momentary  sacrifice,  the  whole  future  of  production. 

"  Every  intervention  of  capital  has  the  effect  of  diminishing 
daily  labor,  resulting  from  the  constantly  recurring  difficulty  of 
an  operation :  thus,  we  have  here  a  village  situated  at  the  dis- 
tance of  a  mile  from  a  river  —  each  of  its  people,  when  he  has 
occasion  for  water,  being  required  to  walk  that  distance.  No 
capital  is  expended,  but  there  is  a  periodical  demand  for  labor, 
carried  to  its  highest  point.  The  inhabitants,  at  length,  conceive 
the  idea  of  making  some  earthen  vessels,  having  done  which,  they 
go  once  a  day — returning  with  the  day's  supply  of  water.  Capital 
now  making  its  appearance  in  the  once-performed  labor  of  making 
the  vessels,  the  daily  expenditure  of  human  effort  is  diminished, 
in  the  proportion  that  the  one  walk  to  the  river,  bears  to  the  five, 
or  six,  that  would,  otherwise,  have  been  required. 

"  Next,  some  one  constructs  a  cask,  and  a  wagon — attaching  to 
the  latter  an  ass,  or  an  ox,  and  carrying  water  about  the  village. 
Here  is  a  new  expenditure  of  capital,  but,  in  return,  there  is  eco- 
nomy in  the  daily  labor — proved  by  the  fact,  that  the  people  now 
buy  their  water,  in  place  of  going  to  get  it.  At  length,  however, 
.an  aqueduct  is  built  —  requiring  an  enormous  expenditure  of 


PRESIDENT   OF   THE   UNITED    STATES.  115 

capital ;  but  the  daily  effort  that  had  been  needed  for  obtaining  a 
supply  of  water  is  from  this  time  at  an  end — capital  having,  so  to 
speak,  altogether  superseded  labor. 

"The  proof  that  all  these  successive  interventions  of  capital 
have  been  economies  of  force,  time,  and  money,  is,  that  all  these 
expenditures  have  been'  returned  in  the  value  of  the  water  ob- 
tained ;  and  that,  while  casks,  wagons,  and  buildings,  have  been 
paid  for  and  maintained,  the  price  of  water  has  steadily  fallen  ;" 
and,  as  the  author  might  well  have  added,  the  consumption  has 
so  much  increased,  that  a  single  family  now  consumes  more  than 
would,  at  first,  have  supplied  the  village. 

In  writing  this  passage,  M.  de  Fontenay  had  no  reference,  what- 
soever, to  the  question  of  protection  —  of  the  claims  of  commerce 
on  the  one  side,  or  of  those  of  trade  on  the  other ;  but,  it  is  the 
characteristic  of  propositions  that  are  true,  that  they,  at  all  times, 
and  everywhere,  prove  themselves  true.  The  great  object  of  man, 
Mr.  President,  being  that  of  acquiring  power  over  nature,  the 
more  he  does  so,  the  less  is  the  value  of  the  commodities  he  re- 
quires, the  greater  is  his  own,  and  the  larger  becomes  his  con- 
sumption. To  attain  power,  there  must  be  combination  of  effort. 
The  obstacle  to  association  being  found  in  the,  necessity  for  trans- 
portation, the  more  it  can  be  removed,  the  greater  is  not  only  the 
present  power  of  man,  but  the  greater  his  capacity  for  new  and 
more  important  efforts.  The  spring  beingi distant,  he  calls  to  his 
aid,  in  regular  succession,  various  natural  forces  —  passing  from 
the  mere  hand  to  the  jug,  the  cask,  and  the  wagon,  with  constant 
decline  in  the  cost  and  value  of  water.  When,  however,  he  con- 
structs an  aqueduct,  and  is  thus  enabled  to  avail  himself  of  the 
power  of  gravitation,  value  ceases — water  becoming  cheap  as  air. 

The  Indian  path  being  bad,  he  determines,  once  for  all,  to 
make  a  road,  the  effect  of  which  is  soon  exhibited  in  the  fact, 
that  he  is  enabled,  once  again  for  all,  to  make  a  turnpike ;  and 
yet,  so  much  are  his  powers  thereby  augmented,  that  we  find  him 
again,  once  for  all,  investing  millions  of  present  labor  in  construct- 
ing a  canal  — then  regarded  as  the  neplus  ultra  of  improvement. 
Here  again,  however,  Mr.  President,  we  find  it  to  be  only  the 
first  step  that  costs  —  the  economy  of  labor  effected  by  the  canal 
proving  so  great,  that  but  a  trivial  portion  is  required  for  the 
construction  of  a  railroad,  that  transports  himself  and  his  mer- 
chandise at  a  cost  so  small,  as  to  treble  the  reward  of  labor. 

The  school-house  being  distant,  his  children  are  obliged  either 
to  dispense  altogether  with  education,  or  to  waste  most  of  their 
time  on  the  road  thereto.  Seeing  himself  surrounded  by  the  ma- 
terials of  which  houses  are  composed,  he  proposes  to  his  neigh- 
bors that  they  shall,  once  for  all,  give  their  labor  to  the  construc- 
tion of  a  house  —  thereby  enabling  themselves  to  economize  the 
labor  of  placing  their  children  on  the  spot  at  which  they  are  to  be 


116  LKTTERS    TO    THE 

instructed  ;  and  now  instruction  so  much  declines  in  cost,  that 
ten  times  as  many  children  are  enabled  to  profit  by  it. 

The  market  being  distant,  he  is  obliged  to  incur,  daily,  the  cost 
of  transferring  his  wool  and  his  corn,  to  be  exchanged  for  cloth. 
Looking  around,  he  sees  that  nature  has  furnished  him  with  the 
same  forces,  precisely,  with  those  in  use  among  the  distant  millers. 
The  fuel  will  give  as  much  heat;  and  the  ore  will  make  iron  of  equal 
strength.  He  therefore  proposes  to  his  neighbors,  that  they  shall, 
once  for  all,  unite  together  for  building  a  stack  through  which  to 
pass  the  ore  and  the  coal,  the  laborers  in  which  will  eat  the  corn 
that  now  they  are  obliged  to  carry  to  the  distant  market  —  thus 
terminating,  at  once  and  for  ever,  the  necessity  for  so  much  trans- 
portation. 

,  The  iron  now  obtained,  he  next,  Mr.  President,  suggests,  that 
steam  can  as  well  be  made  to  spin  and  weave  cotton  in  their  own 
neighborhood,  as  in  any  other ;  that  stone,  lumber,  and  lime,  are 
abundant — all  that  is  required,  for  economizing  the  daily  labor 
of  transportation,  being,  that  they  should,  once  for  all,  club  to- 
gether for  putting  up  a  house,  and  for  bringing  from  abroad  a 
little  machinery,  and  the  skill  required  for  working  it.  Further, 
he  says  to  them  :  "  We  are,  ourselves,  unemployed  for  more  than 
half  our  time,  and,  as  regards  our  children,  they  are  almost  wholly 
so.  Though  unfit  for  the  labors  of  the  field,  they  yet  could  well 
perform  the  lighter  work  of  tending  the  operations  of  a  mill. 
Again,  the  minds  of  our  people  are  undeveloped.  Let  us  have 
them  taught,  and  in  a  brief  time  —  obtaining  machinists  of  our 
own  —  it  may  be.  that  we  shall  be  enabled  to  teach  those  among 
whom  we  now  must  seek  for  knowledge.  We  waste,  daily,  the 
powers  of  earth  and  air,  for  want  of  little  machines,  that  would 
enable  us  to  use  them  ;  we  waste  the  faculties  of  our  people,  be- 
cause there  is  no  demand  for  them  ;  we  waste  their  time  and  our 
own,  for  want  of  combination ;  we  waste  the  major  part  of  the 
products  of  our  land  in  feeding  the  horses  and  men  who  carry  the 
rest  to  market  —  exhausting  the  soil,  because  the  market  for  its 
products  is  so  very  distant.  Let  us,  then,  once  for  all,  combine 
for  the  purpose  of  putting  a  stop  to  all  this  waste.  With  every 
step  we  make  in  that  direction,  we  shall  offer  new  inducements 
for  carpenters  and  masons,  printers  and  teachers,  to  come  among 
us  —  eating  the  food,  that  now  we  are  forced  to  carry  to  the  dis- 
tant market ;  with  each,  the  faculties  of  our  people  will  become 
more  and  more  developed — enabling  us  more  and  more  to  perfect 
the  various  processes  by  means  of  which  to  obtain  command  over 
steam  and  other  natural  forces.  With  each,  there  will  be  an  in- 
crease of  commerce  among  ourselves,  attended  by  diminution  of 
our  dependence  on  the  trader,  and  an  increase  of  power  to  com- 
mand his  services  in  case  of  need.  The  more  numerous  the 
differences  among  ourselves,  the  more  rapid  will  be  the  motion  of 
the  societary  machine,  the  greater  will  be  the  economy  of  labor, 


PRESIDENT   OF  THE   UNITED   STATES.  117 

the  smaller  will  be  the  value  of  commodities,  and  the  greater  that 
of  man.-7' 

Such,  Mr.  President,  were  the  objects  sought  to  be  attained  by 
Colbert,  to  whom  France  was  indebted  for  the  system  since  so 
steadily  carried  out ;  that,  to  which  she  owes  it,  that  she  has 
"covered  herself  with  machinery  and  mills" — that  "her  collieries, 
her  furnaces,  and  her  workshops  of  every  description,  have  grown 
to  an  enormous  extent,  and  out  of  all  proportion  to  what  existed 
eighty  years  since  " — that  the  value  of  her  land  has  so  immensely 
increased  —  that  the  power  of  the  laborer  to  command  supplies 
of  food  has  doubled,  where,  even,  it  has  not  trebled  —  and  that 
she  herself  is  now  so  powerful. 

Directly  the  reverse  of  this,  is  the  doctrine  lying  at  the  founda- 
tion of  the  system  that  would  make  of  Britain  the  workshop  of  the 
world ;  that,  for  the  maintenance  of  which,  we  are  taught  that 
man  begins  everywhere  with  the  richest  soils  —  all  old  communi- 
ties being  required  to  resort  to  poorer  ones,  with  daily  diminution 
in  the  demand  for  labor.  To  our  farmers  and  planters,  and  to 
those  of  Brazil  and  Cuba,  it  says — "Cultivate  your  rich  soils, 
and  leave  us  to  our  poor  ones.  Labor  being  cheap  with  us,  we 
can  manufacture  more  cheaply  than  you  can  do.  Do  not,  there- 
fore, once  for  all,  build  mills  or  furnaces  ;  continue  year  after 
year  to  expend  your  labors  in  carrying  produce  back  and  forth ; 
continue  to  exhaust  your  land  ;  continue  to  have  no  combination 
of  effort  among  yourselves  ;  and  you  will  grow  rich.  The  time, 
however,  will  arrive,  when  you  will  be  forced  to  cultivate  the  poor 
soils,  and  then  you  will  be  troubled  with  over-population.  Wages 
falling,  you  may  then  be  enabled  to  accumulate  the  capital  required 
for  entering  into  competition  with  us  ;  that  is  to  say,  the  poorer 
you  become,  the  greater  will  be  your  power." 

Such,  Mr.  President,  is  the  doctrine  of  the  school  that  is  based 
upon  the  idea  of  trade  being  the  first  pursuit  of  man ;  that,  by 
help  of  which  the  system  has,  thus  far,  been  carried  out.  It  is 
one  which  cannot  stand  against  the  facts  everywhere  established, 
that  man  always  commences  with  the  poorer  soils ;  that  it  is  only 
with  the  growth  of  the  power  of  association  and  combination  that 
the  richer  ones  are  brought  into  activity ;  that,  to  have  combina- 
tion, there  must  be  differences  of  employment,  tending  to  the  de- 
velopment of  the  individual  faculties ;  and  that,  where  such  differ- 
ences are  not  found,  the  whole  course  of  man  is  towards  the  ex- 
haustion of  the  land  first  cultivated — towards  diminution  in  its 
value,  and  increase  in  that  of  all  the  commodities  required  for 
his  use — and  towards  his  enslavement,  both  by  nature  and  by  his 
fellow-man.  Under  that  system  it  is,  that  Ireland  wastes,  weekly, 
more  labor  than  would,  if  applied  once  for  all,  give  her  the  ma- 
chinery required  for  enabling  her  to  make  a  domestic  market  for 
all  her  food,  and  all  her  labor ;  that  Portugal  and  Turkey  waste, 
daily,  more  muscular  and  intellectual  power  than  would,  if  applied 


118  LETTERS   TO   THE 

once  for  all,  give  them  machinery  for  making  all  the  cloth  they 
now  consume ;  that  Jamaica  has  been  exhausted ;  and  that  the 
people  of  India  have  been  condemned  to  remain  idle,  when  they 
would  desire  to  be  employed  ;  to  relinquish  rich  soils,  and  retire  to 
poor  ones ;  to  abandon  cities  iu  which  once  lived  hundreds  of 
thousands  of  poor,  but  industrious  and  happy,  men  —  foregoing 
all  the  advantages  of  commerce,  and  becoming  dependent,  alto- 
gether, on  the  chances  of  trade. 

Following  in  the  lead  of  France,  the  people  of  Northern  Eu- 
rope, generally,  have  protected  themselves  against  this  system  — 
the  result  being  seen  in  the  facts,  that  the  prices  of  raw  materials 
and  finished  commodities  are  there  steadily  approximating ;  that 
gold  flows  rapidly  in  ;  that  the  rate  of  interest  is  moderate  ;  that  the 
circulation  of  society  becomes  from  day  to  day  more  rapid ;  that 
the  proportion  borne  by  fixed  to  floating  capital  is  a  constantly 
increasing  one  ;  and  that  the  power  of  the  trader  and  transporter 
rapidly  declines — all  of  these  phenomena  being  evidences  of  ad- 
vancing civilization,  consequent  upon  the  determination,  once  for 
all,  to  make  the  investments  required  for  bringing  the  consumer 
to  the  side  of  the  producer,  and  thus  relieving  the  former  from 
the  wasting  tax  of  transportation. 

Guided,  or  governed,  by  England,  Ireland,  Turkey,  Portugal, 
and  the  United  States,  have  refused  to  make  the  effort,  once  for 
all,  to  relieve  themselves  from  that  oppressive  and  daily  recurring 
tax — the  result  being  seen  in  the  facts,  that  the  prices  of  raw  ma- 
terials and  finished  products  steadily  recede  from  each  other; 
that  gold  flows  regularly  abroad;  that  the  rate  of  interest  is 
high ;  that  circulation  becomes  more  languid  ;  that  the  proportion 
borne  by  floating  capital  to  that  which  is  fixed  is  a  constantly  in- 
creasing one ;  and  that  the  power  of  the  trader  and  transporter 
steadily  increases — all  of  these  phenomena  being  evidences  of  de- 
clining civilization. 

Food,  Mr.  President,  is  capital.  Having  been  consumed,  it  is 
still  capital,  in  the  form  of  the  power  to  labor,  with  the  body,  or 
the  mind,  or  both.  That  power  being  exerted,  it  re-appears  in 
the  form  of  food  or  cloth  —  books  or  newspapers.  Not  exerted, 
it  is  altogether  lost  —  labor-power  being,  as  you  have  seen,  the 
only  commodity,  that  cannot  be  kept,  even  for  a  second. 

The  power  to  accumulate  capital  exists  in  the  direct  ratio  of 
the  power  of  combination,  and  that  itself  exists  in  the  ratio  of  the 
diversity  of  employments.  That  understood,  there  can  be  little 
difficulty  in  arriving  at  a  proper  understanding  of  the  causes,  why 
it  accumulates  so  rapidly  in  Central  and  Northern  Europe,  and 
why  it  disappears  so  rapidly  from  Turkey  and  Portugal,  Ireland 
and  India. 

Careful  study  of  these  simple  principles,  Mr.  President,  will 
enable  us  readily  to  understand  why  it  has  been,  that  capital  has 
always  so  much  abounded,  when  we  have  had  protection,  and  why 


PRESIDENT   OF   THE    UNITED    STATES.  119 

it  has  so  entirely  disappeared,  when  we  have  had  the  system  known 
by  the  title  of  "free  trade."  The  one  looked  to  economizing 
labor,  which  itself  is,  as  you  have  seen,  capital.  The  other  looks 
to  wasting  labor,  or  capital.  Under  the  one,  as  in  1833  and  1846, 
capital  was  readily  obtainable,  at  moderate  rates  of  interest,  for 
any  useful  purpose.  Under  the  other,  as  in  1822  and  1842,  and 
as  at  the  present  time,  it  has  become  so  scarce,  as  to  be  unattain- 
able for  the  construction  of  roads,  for  the  building  of  mills,  or  for 
the  opening  of  mines,  at  any  rate  of  interest,  however  high. 

Were  the  tariff  of  1842  this  day  re-enacted  into  law,  the  face 
of  affairs  throughout  the  country  would  be  wholly  changed  — 
capital  becoming  at  once  abundant — the  rate  of  interest  falling — 
and  labor  coming  into  demand  to  such  extent,  that  men,  women, 
ami  children,  would  find  all  the  employment  they  could  desire ; 
and  that,  too,  before  the  lapse  of  thirty  days  from  the  present 
hour.  Why,  Mr.  President,  would  it  be  productive  of  such  re- 
sults ?  Because,  there  would  at  once  arise,  throughout  the  coun- 
try, a  confidence,  that  labor  was  again  to  be  economized  —  that 
that  internal  intercourse  which,  as  you,  Mr.  President,  have  seen, 
we  so  greatly  need,  was  to  be  obtained  —  that  the  great  domestic 
market  for  food  and  labor  was  to  be  extended — and  that  we  were 
again  to  become  rich  and  strong  enough  to  be  enabled  to  purchase 
full  supplies  of  the  precious  metals,  as  was  the  case  in  the  protec- 
tive periods  which  closed  in  1835  and  1847. 

What  we  need  is  confidence  in  the  future.  Let  that  be  ob- 
tained, and  capital  will,  from  the  instant,  become  as  abundant  as 
we  have  ever  known  it.  Give  us  that,  and  there  will  exist  no 
barrier  to  the  maintenance  of  a  specie  circulation.  Give  us  that, 
and  the  occasion  for  extending  the  central  powers  at  the  expense 
of  the  local  ones,  will  pass  away.  Give  us  that,  and  our  every 
future  step  will  be  towards  happiness,  wealth,  and  power,  and 
towards  domestic  and  foreign  peace.  Refuse  that,  and  each  suc- 
cessive step  will  be  attended  by  growing  misery  among  the  peo- 
ple, and  discord  among  the  States. 

The  strength  of  every  nation,  as  compared  with  other  nations, 
grows  in  the  ratio  of  the  growth  of  the  power  of  combination 
among  the  people  of  whom  it  is  composed.  That  power  grows 
with  the  growing  diversity  of  employments.  With  us,  that  diver- 
sity diminishes,  and  hence  the  steady  decline  in  the  respect  iu 
which  we  are  held,  and  in  the  power  we  exercise. 
With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  February  16th,  1858. 


120  LETTERS   TO    THE 


LETTER    TWENTY-FIRST. 

How  is  it,  that  protection  can  be  needed  ?  Why  is  it,  that  each 
and  every  man  is  not  to  be  free  to  use  his  products  as  he  pleases 
—  exchanging,  equally  freely,  abroad  and  at  home?  How  is  it 
possible,  that  our  people  have  been,  or  can  ever  be,  more  pros- 
perous under  a  protective  system,  than  under  what  is  called  a 
"free  trade"  one?  These,  Mr.  President,  are  important  ques- 
tions—  seeking  replies  to  which,  we  must  now  turn  to  some  of  the 
pages  of  our  Colonial  history. 

In  one  respect,  the  Colonial  system  of  England  has  differed  from 
all  others  that  have  existed — the  moving  principle  of  its  founders, 
as  well  as  of  all  those  who  since  have  followed  in  its  direction, 
having  been,  that  of  prohibiting  every  attempt,  on  the  part  of  the 
colonists,  at  attaining  that  diversity  of  employments  which  is  re- 
quired for  securing  competition  for  the  purchase  of  their  own  rude 
products,  or  for  the  sale  of  finished  commodities  required  in  ex- 
change—  and  thus  maintaining,  at  its  highest  point,  the  tax  of 
transportation.  Without  such  diversity,  the  power  of  association 
and  combination  could  have  no  existence.  Without  it,  the  colo- 
nists were  bound  to  remain,  for  ever,  mere  instruments  in  the 
hands  of  the  traders  and  transporters  of  the  mother-country. 
That  such  were  really  the  objects  sought  to  be  accomplished,  is 
shown  in  the  following  passage  from  the  work  of  an  influential 
writer  of  the  last  century,  to  which  I  desire  now,  Mr.  President, 
to  invite  your  attention  :  — 

"  Manufactures  in  our  American  colonies  should  be  discouraged, 
prohibited."  *  *  "We  ought  always  to  keep  a  watchful  eye 
over  our  colonies,  to  restrain  them  from  setting  up  any  of  the 
manufactures  which  are  carried  on  in  Great  Britain  ;  and  any 
such  attempts  should  be  crushed  in  the  beginning. "  *  *  "  Our 
colonies  are  much  in  the  same  state  as  Ireland  was  in,  when  they 
began  the  woollen  manufactory,  and  as  their  numbers  increase, 
will  fall  upon  manufactures  for  clothing  themselves,  if  due  care 
be  not  taken  to  find  employment  for  them,  in  raising  such  pro- 
ductions as  may  enable  them  to  furnish  themselves  with  all  the 
necessaries  from  us."  *  *  "As  they  will  have  the  providing 
rough  materials  to  themselves,  so  shall  we  have  the  manufacturing 
of  them.  If  encouragement  be  given  for  raising  hemp,  flax,  &c., 
doubtless  they  will  soon  begin  to  manufacture,  if  not  prevented. 
Therefore,  to  stop  the  progress  of  any  such  manufacture,  it  is 
proposed  that  no  weaver  have  liberty  to  set  up  any  looms,  with- 
out first  registering  at  an  office,  kept  for  that  purpose."  *  * 
"  That  all  slitting-mills,  and  engines  for  drawing  wire  or  weaving 
stockings,  be  put  down."  *  *  "  That  all  negroes  be  jwohi- 


PRESIDENT   OF   THE    UNITED   STATES.  121 

bited  from  weaving  either  linen  or  woollen,  or  spinning  or 
combing  of  wool,  or  working  at  any  manufacture  of  iron,  further 
than  making  it  into  pig  or  bar  iron.  That  they  also  be  prohibited 
from  manufacturing  hats,  stockings,  or  leather  of  any  kind.  This 
limitation  will  not  abridge  the  planters  of  any  liberty  they  now 
enjoy  —  on  the  contrary,  it  will  then  turn  their  industry  to  pro- 
moting and  raising  those  rough  materials."  *  *  "  If  we 
examine  into  the  circumstances  of  the  inhabitants  of  our  planta- 
tions, and  our  own,  it  will  appear  that  not  one-fourth  of  their 
product  redounds  to  their  own  profit,  for,  out  of  all  that  comes 
here,  they  only  carry  back  clothing  ana"  other  accommodations 
for  their  families,  all  of  which  is  of  the  merchandise  and  manu- 
facture of  this  kingdom."  *  *  "All  these  advantages  we  re- 
ceive by  the  plantations,  besides  the  mortgages  on  the  planters' 
estates  and  the  high  interest  they  pay  us,  which  is  very  consider- 
able.'"— (GEE  on  Trade,  London,  1750.) 

Turning  now,  Mr.  President,  to  the  statute-book,  you  will  find 
a  continued  series  of  laws,  each  and  every  one  of  which  had  for 
its  object,  that  of  carrying  out  the  system  above  described  —  pro- 
hibitions of  manufactures,  on  one  hand,  and  bounties  on  the  im- 
port of  raw  materials,  on  the  other,  having  been  resorted  to,  for 
preventing  the  colonists  from  making  those  changes  in  their 
rude  products,  that  were  required  for  fitting  them  for  consump- 
tion among  themselves.  The  one  great  object  of  the  system, 
was  that  of  maintaining  in  its  most  bulky  form,  the  commodity 
requiring  to  be  transported,  while  contracting,  as  far  as 
possible,  the  machinery  by  which  the  work  of  transportation 
and  conversion  was  to  be  effected  —  thereby  enriching  the  trader 
and  transporter  at  the  cost  of  both  consumer  and  producer.  The 
more  perfectly  it  could  be  carried  out,  the  greater  would  be  the 
difference  between  the  prices  of  raw  materials  and  finished  com- 
modities—  the  greater  would  be  the  tendency  towards  exhaustion 
of  the  soil  and  ruin  of  its  cultivators  —  the  more  would  the  people 
become  dispersed  —  the  heavier  would  become  the  tax  of  trans- 
portation, and  the  more  entirely  would  it  be  thrown  upon  the 
colonists,  who  were  thus  to  be  impoverished,  for  the  benefit  of 
those  by  whom  the  laws  were  made. 

To  the  grinding  taxation  of  a  system  which,  thus,  looked  to  the 
establishment  of  a  monopoly  of  the  power  to  purchase  the  rude 
products  of  the  earth,  and  to  sell  the  commodities  into  which  they 
became  converted,  and  not  to  a  paltry  tax  on  tea,  Mr.  President, 
are  we  indebted  for  the  Declaration  of  our  Independence,  and  the 
war  which  followed  it.  To  a  desire  for  rendering  that  declaration 
effective,  by  protecting  our  farmers  and  planters  against  the  sys- 
tem, was  largely  due  the  calling  of  the  Convention  which  gave  us 
our  Constitution — a  very  brief  experience  having  sufficed  to  satisfy 
the  various  States,  and  Virginia  most  especially,  that  concert  of 
action  for  resistance  to  it,  was  essential  to  the  advance  of  the 


122  LETTERS   TO   THE 

Union  in  wealth  aud  power.  To  the  knowledge  of  its  action 
acquired  in,  or  derived  from,  colonial  times,  it  was  due,  that  each 
and  every  of  our  Presidents,  from  Washington  to  Jackson,  held, 
that  it  was  not  only  the  right,  but  the  duty,  of  Congress,  so  to 
direct  the  power  with  which  it  was  clothed,  as  to  promote  the 
approximation  of  the  producer  and  the  consumer,  aud  thus  to 
diminish  the  enormous  taxes  of  trade  and  transportation,  by  means 
of  which,  the'farmers  aud  planters  had  been  so  much  impoverished 
—  to  produce  competition  for  the  purchase  of  raw  produce,  and 
for  the  sale  of  finished  commodities,  and  thus  secure  to  the  agri- 
cultural interest  that  freedom  of  commerce  which  is  denied  to  him 
who  must  make  his  exchanges  at  the  single  mill ;  and  in  this 
manner,  to  carry  into  practical  effect,  that  independence  whose 
existence  had  been  declared  in  1776. 

Such,  Mr.  President,  were  the  general  tendencies  of  the  country, 
during  the  half  century  which  followed  the  peace  of  1783  —  a  pe- 
riod remarkable  beyond  any  other  recorded  in  the  history  of 
modern  Europe,  for  commercial  disturbance ;  one,  in  which  piracy 
on  the  ocean — sanctioned  by  French  decrees  and  British  Orders  in 
Council  —  embargoes,  non-intercourse  acts,  and  wars  with  both 
France  and  England,  combined  for  the  production  of  financial 
derangement ;  and  yet,  that  one  in  our  history  which  stands  dis- 
tinguished by  the  fact,  that  poor  as  we  then  were,  our  banks  were 
never,  in  time  of  peace,  driven  to  suspension  ;  nor  were  either  the 
people,  or  the  government,  driven  to  the  disgraceful  necessity  of 
resorting  to  the  use  of  irredeemable  paper,  as  the  only  means  of 
maintaining  the  societary  circulation. 

Five-and-twenty  years  have  since  elapsed,  and  during  nearly  all 
that  period,  the  doctrines  of  our  revolutionary  fathers,  as  regarded 
commercial  policy,  have  been  repudiated  —  the  essential  duty  of 
the  central  government  having  been  held  to  be,  that  of  providing 
for  itself,  careless  of  the  effect  of  its  measures  upon  the  condition 
of  the  people.  So  far  as  was  required  for  their  taxation,  tariffs 
might,  as  we  have  been  assured,  be  tolerated ;  but  so  far  as  re- 
quired for  their  protection,  they  could  not  —  free  trade,  as  it  has 
been  called,  having  been  the  order  of  the  day. 

In  what,  however,  Mr.  President,  does  our  present  freedom  of 
trade  consist?  Is  the  planter  free  to  exchange  his  cotton,  abroad 
or  at  home,  at  his  pleasure  ?  Is  there  that  growing  competition 
for  his  products,  which  tends  to  raise  their  prices  ?  That,  there 
certainly  is  not  —  nearly  all  our  mills  being  closed,  aud  he  being 
reduced  to  dependence  on  distant  markets,  such  as  he  has  not 
known  since  the  disastrous  times  of  1842.  — Are  our  farmers  free 
to  exchange  their  food,  abroad  or  at  home,  for  iron  with  which 
to  make  their  roads  ?  Is  there  a  growing  competition  for  the 
purchase  of  food,  and  the  sale  of  iron  ?  Certainly  not —  our  fur- 
naces and  rolling-mills  being  closed  —  the  men  who  wrought  in 
them,  turned  adrift  —  and  the  necessity  for  going  to  the  distant 


PRESIDENT   OF   THE   UNITED    STATES.  123 

markets  with  wheat  and  corn,  being  greater  now,  than  it  has  been 
since  1842. — Are  our  workingmen  free  to  sell  their  labor  when 
and  where  they  please  ?  Do  they  find  increase  of  competition  for 
the  purchase  of  the  single  commodity  they  have  to  sell  ?  Assuredly 
not  —  there  being  ten  who  have  labor  for  sale,  to  every  one  who 
is  seeking  to  purchase  it.  —  Look  where  you  may,  Mr.  President, 
you  will  find  a  diminution  of  competition  for  the  purchase  of  labor 
and  the  rude  products  of  the  land,  the  commodities  we  have  to 
sell — the  laborer,  the  farmer,  and  the  planter,  becoming,  from 
hour  to  hour,  more  and  more,  mere  instruments  to  be  used  by  the 
trader  and  transporter ;  and,  for  the  simple  reason,  that  it  has  been 
held  by  your  recent  predecessors  in  the  Presidential  chair,  that  the 
central  government  had  only  itself,  and  not  the  people,  to  protect. 
Widely  different  from  this,  Mr.  President,  were  the  ideas  of  Wash- 
ington and  Hamilton,  Adams  and  Jefferson,  as  to  the  rights  and 
duties  of  that  government. 

Freedom  of  commerce  among  ourselves — the  commerce  between 
our  towns,  cities,  and  States,  which,  as  you  have  so  ably  shown, 
is  the  sort  of  free  trade  we  need  —  has  no  existence.  The  farmers 
of  Illinois  exchange  between  themselves,  by  means  of  the  furnaces 
of  Wales  and  Scotland.  The  Iowa  farmer  can  make  no  exchange 
with  the  Mississippi  planter,  until  after  the  corn  and  cotton  have 
travelled  to  Manchester,  there  to  be  converted  into  cloth  to  be 
returned  to  Iowa  and  Mississippi  —  eighty-five  per  cent,  of  the 
corn  and  cotton  being  taken  on  the  road,  for  the  support  of  the 
people  by  whom  the  exchanges  are  effected.  Why  this  is  so  — 
why  our  farmers  and  planters  are  thus  subjected  to  a  tax  of  trans- 
portation, compared  with  which,  that  of  France  and  Germany  is 
as  nothing — you  will,  Mr.  President,  readily  understand,  after  hav- 
ing read  the  following  passage,  extracted  from  a  document  pub- 
lished but  four  years  since,  by  order  of  the  British  House  of  Com- 
mons :  — 

"  The  laboring  classes  generally,  in  the  manufacturing  districts 
of  this  country,  and  especially  in  the  iron  and  coal  districts,  are 
very  little  aware  of  the  extent  to  which  they  are  often  indebted 
for  their  being  employed  at  all  to  the  immense  losses  which  their 
employers  voluntarily  incur  in  bad  times,  in  order  to  destroy 
foreign  competition,  and  to  gain  and  keep  possession  of  foreign 
markets.  Authentic  instances  are  well  known  of  employers  hav- 
ing in  such  times  carried  on  their  works  at  a  loss  amounting  in 
the  aggregate  to  three  or  four  hundred  thousand  pounds  in  the 
course  of  three  or  four  years.  If  the  efforts  of  those  who  encou- 
rage the  combinations  to  restrict  the  amount  of  labor  and  to  pro- 
duce strikes  were  to  be  successful  for  any  length  of  time,  the  great 
accumulations  of  capital  could  no  longer  be  made  which  enable  a 
few  of  the  most  wealthy  capitalists  to  overwhelm  all  foreign 
competition  in  times  of  great  depression,  and  thus  to  clear  the 
way  for  the  whole  trade  to  step  in  when  prices  revive,  and  to 


124  LETTERS    TO    THE 

carrj  on  a  great  business  before  foreign  capital  can  again  accu- 
mulate to  such  an  extent  as  to  be  able  to  establish  a  competition 
iu  prices  with  any  chance  of  success.  The  large  capitals  of  this 
country  are  the  great  instruments  of  warfare  against  the  com- 
peting capital  of  foreign  countries,  and  are  the  most  essential 
instruments  now  remaining  by  which  our  manufacturing  supremacy 
can  be  maintained;  the  other  elements  —  cheap  labor,  abundance 
of  raw  materials,  means  of  communication,  and  skilled  labor  — 
being  rapidly  in  process  of  being  equalized." 

The  system  here  described  is  very  properly  characterized  as 
"warfare;"  and  we  may  properly  inquire  for  what  purposes,  and 
against  whom,  it  is  waged.  It  is  a  war,  as  you  see,  Mr.  President, 
for  cheapening  all  the  commodities  we  have  to  sell,  labor  and  raw 
materials — being  precisely  the  objects  sought  to  be  accomplished 
by  the  "  Mercantile  System,"  whose  error  was  so  well  exposed  in 
the  Wealth  of  Nations.  It  is  a  war  for  compelling  the  people  of 
other  lands  to  confine  themselves  to  agriculture  —  for  preventing 
the  diversification  of  employments  in  other  countries — for  retard- 
ing the  development  of  intellect  —  for  palsying  every  movement, 
elsewhere,  looking  to  the  utilization  of  the  metallic  treasures  of  the 
earth  —  for  increasing  the  difficulty  of  obtaining  iron  —  for  dimin- 
ishing the  demand  for  labor  —  for  doing  all  these  things  at  home 
and  abroad  —  and  for  thus  subjecting  the  farmers  and  planters  of 
the  world  to  the  domination  of  the  manufacturers  of  Britain. 

To  measures  such  as  here  described,  was  due  the  closing  of  all 
the  factories  of  India,  followed  by  the  exportation  of  cotton  to 
England,  there  to  compete  with  the  products  of  Carolina  and  Ala- 
bama. The  more  perfectly  the  system  can  be  carried  out  —  the 
more  the  manufacture  can  be  restricted  to  England — the  cheaper 
must  be  raw  materials ;  but  the  greater  must  be  the  export  of 
cheap  labor  to  Texas  and  to  the  Mauritius,  there  to  raise  more 
cotton,  sugar,  and  other  rude  products  ;  and  thence  to  compete 
with  each  other  for  the  reduction  of  prices,  and  for  the  more  com- 
plete enslavement  of  the  laborers  of  all  those  countries. 

In  the  case  of  a  war  like  this,  what,  Mr.  President,  does  a 
government  owe  to  its  people  and  itself?  The  answer  to  this 
question  is  furnished  by  one  of  the  most  distinguished  of  your  pre- 
decessors, Mr.  Madison,  in  the  following  words  :  — 

"  Should  it  happen,  as  has  been  suspected,  to  be  an  object, 
though  not  of  a  foreign  government  itself,  of  its  great  manufac- 
turing capitalists,  to  strangle  in  the  cradle  the  infant  manufactures 
of  an  extensive  customer,  or  an  anticipated  rival,  it  would  surely, 
in  such  a  case,  be  incumbent  on  the  suffering  party  so  far  to  make 
an  exception  to  the  '  let-alone '  policy  as  to  parry  the  evil  by  op- 
posite regulations  of  its  foreign  commerce." 

That  such  is  the  duty  of  a  government,  no  one  can  seriously 
doubt ;  and  yet,  that  duty  has  remained  unperformed.  Time 
after  time,  for  the  last  half  century,  have  the  iron,  the  cotton,  and 


PRESIDENT   OF   THE   UNITED   STATES.  125 

the  woollen  manufactures,  been  stricken  down  by  means  of  mea- 
sures such  as  here  are  indicated,  without  the  slightest  attempts  at 
interference  on  the  part  of  the  central  government.  Crisis  has 
succeeded  crisis,  and  with  each  successive  one,  the  necessity  for 
the  export  of  raw  materials  has  increased,  with  steady  decline  of 
prices,  and  as  steadily  increasing  necessity  for  the  export  of  the 
precious  metals  to  discharge  the  balance  of  trade,  thus  forced 
upon  our  people.  Hence,  Mr.  President,  the  difficulty  of  main- 
taining a  stable  currency.  Hence  the  ruinous  rate  of  interest. 
Hence  the  disasters  among  our  merchants  and  our  banks.  Hence 
the  decline  in  the  character  of  our  ships.  Hence  our  inability  to 
compete  with  the  world  in  the  use  of  steam  for  ocean-navigation. 
Hence  the  decline  of  morals  ;  and,  hence  the  discord  now  prevail- 
ing between  the  different  sections  of  the  Union. 

Allow  me  now,  Mr.  President,  to  ask  you  to  read,  once  more, 
the  extract  with  which  this  letter  was  commenced,  and  study  care- 
fully what  were  the  objects  sought  to  be  accomplished  by  the  dis- 
tant masters  by  whom  the  provinces  then  wei'e  ruled.  Doing  this, 
you  will  see,  that  they  were  those  of  limiting  the  colonists  to  the 
single  pursuit  of  scratching  the  soil,  and  thus  destroying  competi- 
tion for  the  purchase  of  their  products.  Turning,  next,  to  the  ac- 
tion of  the  Federal  government,  you  can  scarcely  fail  to  remark, 
how  identical  with  the  views  of  the  British  traders  of  colonial 
times,  have  been  its  acts. 

There,  be  assured,  lies  all  the  difficulty,  and  not  with  the  local 
governments.  Clothed  with  the  power  to  protect  our  people,  it 
has  failed  in  the  performance  of  its  duties — leaving  them  exposed 
to  a  warfare  of  the  most  destructive  kind,  and  to  a  taxation  for 
the  support  of  foreign  governments  and  peoples,  compared  with 
which,  the  amount  that  would  be  required  for  the  support  of  the 
largest  fleets  and  armies,  sinks  into  insignificance.  As  a  conse- 
quence of  this,  we  are  rapidly  passing  into  a  state  of  dependence 
more  complete  than  that  which  existed  in  1776.  Further  proof 
of  this,  I  propose  to  furnish  in  another  letter,  remaining  mean- 
while, 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 

Philadelphia,  February  Wth,  1858. 


126  LETTERS   TO   THE 


LETTER   TWENTY-SECOND. 

THE  system  described  in  my  last  letter,  Mr.  President,  is,  as  you 
have  seen,  a  war  upon  the  agricultural  communities  of  the  world, 
for  the  reduction  of  the  prices  of  their  rude  products.  To  what 
extent,  it  has  resulted  in  reducing  the  prices  of  our  staples,  you 
have  already  seen,  How  it  taxes  the  planters  and  farmers  every- 
where, I  propose  now  to  show,  and  with  that  view,  will  commence 
by  asking  your  attention  to  the  following  comparative  view  of  the 
exports  from  Great  Britain  at  the  close  of  the  great  European 
war,  and  at  the  opening  of  the  gold-trade  of  California  :  — 

1815.  1851. 

Export  of  woollens £9,381,426  £10,314,000 

"  cottons 20,620,000  30,078,000 

«  silks 622,118  1,329,000 

«  linens 1,777,663  5,048,000 

And  of  other  commodities 19,231,684  21,723,569 


Total £51,632,791   £68,492,569 

Nearly  the  whole  increase  that  had  taken  place,  in  the  long 
period  of  thirty-six  years,  was  thus  found  in  four  branches  of 
manufacture,  the  materials  of  which  were  wholly  drawn  from 
abroad,  as  is  shown  in  the  following  statement  of  imports  for 
that  year :  — 

Wool 83,000,000  Ibs. 

Cotton 700,000,000   " 

Silk 5,020,000   " 

Flax 135,000,000   « 

Eggs 116,000,000  No. 

Oxen,  cows,  calves,  sheep,  hogs,  &c 300,000    " 

Corn 8,147,675  qrs. 

Flour 5,384,752  cwt. 

Potatoes 635,000   " 

Provisions 450,000    " 

Butter 354,000   " 

Cheese 338,000   " 

Hams  and  lard 130,000   « 

Rice 450,000   " 

Spirits , 2,000,000  galls. 

Before  proceeding  to  examine  the  figures  above  presented,  I 
desire,  Mr.  President,  to  invite  your  attention  to  the  idea,  that 
those  who  furnish  the  food,  clothing,  and  lodging,  do,  in  fact, 
furnish  the  power.  A  locomotive  engine  is  merely  the  instrument 
by  means  of  which,  the  force  yielded  by  the  consumption  of  fuel  is 
made  to  serve  the  purposes  of  man.  So  it  is  with  men.  Their 


PRESIDENT  OF   THE   UNITED   STATES.  127 

daily  power  to  labor  results  from  their  daily  consumption  of  food  ; 
and  therefore  is  it,  that  those  who  supply  the  food  and  clothing, 
are  really  the  parties  who  supply  the  power  that  is  used.  That 
understood,  we  may  now  inquire  how  many  of  the  people  of  Eng- 
land are  fed  by  the  agricultural  nations  of  the  world,  preparatory 
to  an  inquiry  into  the  number  there  employed,  in  doing  their  work. 
Divided  among  four  millions  of  persons,  the  articles  of  food 
included  in  the  above,  would  give  to  each  about 

1100  pounds  of  corn, 


150 
12 
16 
18 
20 
12 


flour, 

fresh  meat, 

salted    " 

potatoes, 

butter  and  cheese 

rice, 


28  eggs,  and  half  a  gallon  of  spirits. 

This  being  much  more  than  the  average  consumption  of  the 
men,  women,  and  children,  employed  in  the  workshops  of  Great 
Britain,  it  may  fairly  be  assumed,  that  the  world  furnishes  four 
millions  of  laborers  with  food  and  clothing,  and  with  shelter, 
too  —  the  chief  part  of  the  timber  there  consumed,  being  drawn 
from  abroad.  •» 

To  the  stock  of  food  above  given,  we  have  now  to  add,  the 
total  quantity  of  coffee  and  tea,  of  cocoa  and  sugar,  of  lemons 
and  oranges,  of  figs  and  raisins,  of  spices  and  tobacco,  consumed 
by  the  whole  eight-and-twenty  millions  of  the  population  of  the 
United  Kingdom. 

•  Of  raw  materials,  foreign  nations  supply  all  the  cotton  and  silk, 
all  the  oil,  all  the  saltpetre,  and  all  the  dye-stuffs;  of  hides,  wool, 
flax,  hemp,  and  various  other  articles,  they  not  only  furnish  all 
that  is  re-exported  in  the  shape  of  manufactures,  but  as  much 
more  as  is  adequate  to  meet  the  demands  of  a  large  portion,  if 
not  even  of  the  whole,  of  the  four  millions  above  referred  to — 
who  may,  therefore,  be  considered  as  being  fed,  clothed,  lodged, 
and  supplied  to  the  English  people,  by  the  other  communities  of 
the  world. 

The  whole  number  of  persons,  old  and  young,  male  and  female, 
employed,  in  1841,  in  the  — 

Cotton,  hose,  lace,  wool,  worsted,  silk,  flax,  and  linen  manufac- 
tures of  Great  Britain,  was .'. 800,246 

In  the  mines 193,825 

In  the  working  of  metals,  as  smelters,  founders,  blacksmiths, 
nail-makers,  brass-founders,  cutlers,  pin  and  needle  makers, 
file  and  lock  makers  —  thus  embracing  all  the  persons  con- 
nected with  the  conversion  of  ores  into  metals,  and  metals 
into  instruments,  whether  for  the  use  of  the  farmer  or  the 
manufacturer,  the  builder  of  houses  or  the  maker  of  cloth 
—  was 803,368 

Making  a  grand  total  of 1,297,439 


128  LETTERS   TO   THE 

The  number  so  employed  in  1851  must  have  been  greater,  and 
may  perhaps  be  properly  estimated  at  1,500,000.  If  so,  it  fol- 
lows, that  the  people  of  the  world  feed,  clothe,  and  shelter,  and 
thus  furnish  the  labor  of,  nearly  three  times  as  many  persons  as 
are,  in  England,  employed  in  mining  her  coal  and  her  iron  ;  in 
smelting  her  ores,  and  making  her  pig,  bar,  and  railroad  iron  ;  in 
constructing  her  machinery  of  every  description  ;  and  in  convert- 
ing iron,  copper,  brass,  cotton,  wool,  silk,  hemp,  and  flax,  into  the 
commodities  required  for  consumption.  Thus,  in  addition  to 
furnishing  nearly  all  the  raw  materials,  they  supply  all  the  labor ; 
and,  further,  they  supply  food,  cloth,  and  lodging,  for  two  and 
a  half  millions  of  persons  otherwise  employed. 

Of  the  million  and  a  half,  there  is,  however,  but  a  small  pro- 
portion that  is  employed  in  working  for  the  foreigners  who  sup- 
ply this  food,  and  these  raw  materials.  Of  the  commodities 
exported,  nearly  all  are  of  the  coarser  kinds,  requiring  very  little 
of  either  skill  or  taste  for  their  preparation.  Thus,  for  instance, 
out  of  an  export  of  £87,000,000  sterling  in  1854,  nearly 
£15,000,000  consisted  of  metals  in  almost  their  rudest  state  — 
having  given  occasion  to  the  exertion  of  very  little  more  than  brute 
force.  Coals  constituted  £1,500,000 ;  while  mere  yarns  amounted 
to  £10,000,000.  Cotton  cloths,  averaging  only  3^7.,  or  f  cents, 
per  yard,  were  nearly  £24,000,000.  Linens,  averaging  8d.  a 
yard,  made  more  than  £4,000,000  ;  while  earthenware,  alkali, 
beer  and  ale,  butter,  candles,  cordage,  fish,  salt,  and  wool,  con- 
tributed £5, 000, 000  towards  the  mass.  The  difference  between 
the  pictures  presented  by  the  French  and  English  exports  is  most 
remarkable  —  the  former  exhibiting  scarcely  anything  that  has 
not  been  very  highly  elaborated —  and  the  latter  furnishing 
evidence,  that,  of  all  the  vast  quantity  of  commodities  received 
from  the  world,  those  returned  have  undergone  that  lowest  amount 
of  preparation  required  for  their  reception  among  an  inferior  po- 
pulation. With  the  exception  of  machinery  and  millwork  to  an 
amount  less  than  £2,000,000,  and  hardware  and  cutlery  to  about 
double  that  sum,  there  is  scarcely  any  thing  in  the  list  of  English 
exports  requiring  either  taste  or  skill.  Seeing  that  such  is  the 
fact,  it  may  well  be  doubted  if  more  than  one-fourth  of  the  labor 
given  to  manufactures — or  that  of  four  hundred  thousand  hands 
—  is  applied  to  the  conversion  of  the  raw  materials  exported; 
but,  to  avoid  the  possibility  of  error,  we  may  assume  it  to  be  even 
as  high  as  one-third  =  five  hundred  thousand  persons  —  being 
one  for  every  eight  whose  labor  is,  as  has  above  been  shown,  fur- 
nished by  the  agricultural  nations  which  find  themselves  compelled 
to  look  to  Britain  for  a  market. 

The  account  between  that  country  and  the  world  at  large  would 
now  appear  to  stand  as  follows  :  — 


PRESIDENT    OF   THE    UNITED    STATES. 


129 


GREAT   BRITAIN. 


DR. 


OR. 


By  the  labor  of  half  a  million  of  per- 
sons— men,  women,  and  children — 
employed  in  the  lowest  order  of  the 
labors  of  conversion. 


By  a  small  portion  of  the  raw  mate- 
rials supplied. 


To  the  labor  of  four  millions  of  per- 
sons there  employed,  while  fed, 
clothed,  and  lodged,  by  other  na- 
tions. 

To  the  sugar,  tea,  coffee,  tobacco, 
fruit,  and  other  commodities,  re- 
quired for  the  consumption  of 
twenty-eight  millions  of  persons. 

To  the  cotton,  flax,  silk,  hemp,  lum- 
ber, and  other  raw  materials,  re- 
quired for  domestic  consumption, 
and  for  exportation. 

Having  studied  the  extraordinary  picture  that  is  here  presented, 
I  will  now  beg  of  you,  Mr.  President,  to  look  once  more  to 
Mr.  Gee's  sketch  of  the  Colonial  system,  given  in  my  last,  there 
to  find  the  assertion  that  "not  one-fourth  part"  of  the  products 
of  the  laborers  of  British  colonies  "redounds  to  their  own  profit" 
— they  obtaining  in  return,  nothing  but  "clothing  and  accommo- 
dation for  their  families,"  and  being  brought,  thereby,  so  much  in 
debt,  as  to  be  compelled  to  mortgage  their  estates,  and  to  pay 
high  interest  to  the  mortgagees.  That  done,  I  have  next  to  re- 
quest, that  you  will  look  to  the  following  sketch  of  the  movement 
of  the  cotton  trade,  with  a  view  to  the  determination  of  the  ques- 
tion, whether,  under  the  existing  policy  of  the  country',  we  are, 
or  are  not,  with  each  successive  year,  becoming  more  completely 
subject  to  the  Colonial  system  :  — 

Forty  years  since,  the  cotton  imported  into  England  amounted 
to  96,000,000  of  pounds  ;  and  it  commanded  then  20^d.  per  pound 
—  equal  to  £8,200,000.* 

About  thirty  years  later,  the  movement  of  the  trade,  according 
to  the  same  authority,  was  as  follows  :  — 

Raw  material,  500,000,000  pounds,  at  5d.  per  pound £10,000,000 

Wages  of  542,000  spinners,  weavers,  bleachers,  &c.,  at  £24  a 

year  each f. 13,000,000 

Wages  of  80,000  engineers,  machine-makers,  smiths,  masons, 

joiners,  &c.,  at  £50  a  year  each 4,000,000 

Profits  of  the  manufacturers,  wages  of  superintendents,  sums  to 

purchase  the  materials  of  machinery,  coals,  &c. 9,000,000 

£36,000,000 

We  see,  here,  that  while  the  raw  material  consumed  was  more 
than  five  times  as  great,  the  selling  price  in  England  was  less 
than  25  per  cent,  greater.  When,  however,  we  reflect  that  with 
every  stage  of  this  increase,  it  had  been  necessary,  because  of  the 
unceasing  exhaustion  of  the  land  in  cultivation,  to  resort  to  new 


*  McCuLLOCH :  Commercial  Dictionary ;  article,  Cotton. 


130  LETTERS   TO   THE 

and  more  distant  lands,  with  constant  increase  in  the  cost  of  trans- 
portation— and  when  we  deduct  the  domestic  charge  thus  created, 
together  with  the  freights,  storages,  brokerages,  and  other  claims, 
upon  this  immense  quantity  —  we  find  that  these  500,000,000 
pounds  could  have  yielded  their  producers,  of  the  various  parts 
of  the  world,  not  more  than  £5,000,000;  or  less  than,  thirty  years 
before,  had  been  received  by  the  producers  of  96,000,000;  and 
less,  too,  than  was  required  to  pay  for  the  damage  done  to  the 
land  —  leaving  altogether  out  of  view  the  cost  of  cultivation.* 

The  £5,000,000  thus  paid  for  the  use  of  so  many  millions  of 
acres,  became  £36,000,000  before  they  left  the  factory  ;  and  yet, 
as  we  have  seen,  the  changes  effected  in  them  were  such  as  re- 
quired only  the  lowest  species  of  skill.  Thence,  they  passed  out 
to  Turkey  and  India,  Ireland  and  Portugal,  Jamaica  and  Spain, 
the  United  States  and  Canada ;  and  before  they  reached  the  con- 
sumers they  had  become  not  less  than  £60,000,000 ;  about  one- 
twelfth  of  which  went  to  the  cotton-grower,  while  the  other  eleven- 
twelfths  were  absorbed  on  the  road  between  those  who  raised  the 
wool,  and  those  who  wore  the  cloth — giving  support  to  thousands, 
and  tens  of  thousands,  of  men  employed  in  blocking  the  wheels  of 
commerce.  The  consequences  of  this  are  seen,  Mr.  'President,  in 
the  facts,  that  the  planter  —  important  as  is  his  commodity  —  can 
nowhere  obtain  proper  machinery  of  cultivation  ;  that  his  lands 
are  everywhere  being  exhausted ;  and  that  slavery  becomes  from 

*  "Few  crops,"  says  a  Southern  journal,  "are  more  exhausting  to  the 
Boil  than  is  the  cotton  crop.  An  immense  amount  of  manure,  usually  con- 
sisting, for  the  most  part,  of  decayed  leaves,  limbs,  and  forest  mould,  is 
required  to  keep  the  land  of  a  cotton  plantation  in  good  condition.  Another 
difficulty  is,  that  cotton  requires  later  cultivation  than  any  other  crop,  leav- 
ing the  planter  but  little  time  to  enrich  or  improve  his  farm  as  he  may 
desire.  An  Alabama  planter  says,  that  cotton  has  destroyed  more  than 
earthquakes,  or  volcanic  eruptions.  Witness  the  red  hills  of  Georgia  and 
South  Carolina,  which  have  produced  cotton  till  the  last  dying  gasp  of  the 
soil  forbade  any  further  attempt  at  cultivation;  and  the  land,  turned  out  to 
nature,  reminds  the  traveller,  as  he  views  the  dilapidated  condition  of  the 
country,  of  the  ruins  of  ancient  Greece." 

The  effects  of  this,  as  exhibited  in  South  Carolina,  are  thus  stated  in  a 
recent  address  issued  by  the  Agricultural  Convention  recently  held  in  that 
State :  — 

"Your  committee  would  earnestly  bring  to  the  attention  of  this  convention 
the  mournful  fact,  that  the  interest  heretofore  taken  by  our  citizens  in  agri- 
cultural improvement  has  become  stationary;  that  our  old  fields  are  enlarg- 
ing; our  homesteads  have  been  decreasing  fearfully  in  number;  and  our 
energetic  sons  are  annually  seeking  the  rich  and  fertile  lands  of  the  South- 
west, upon  which  they  imagine  that  treble  the  amount  of  profits  can  be 
made  upon  capital  than  upon  our  own  soils.  Nor  is  this  all.  We  are  not 
only  losing  some  of  our  most  energetic  and  useful  citizens,  to  supply  the 
bone  and  sinew  of  other  States,  but  we  are  losing  our  slave  population,  which 
is  the  true  wealth  of  the  State.  Our  stocks  of  hogs,  horses,  mules,  and 
cattle,  are  diminishing  in  size  and  decreasing  in  number,  and  our  purses  are 
being  strained  for  their  last  cent  to  supply  their  places  from  the  Northwest- 
ern States." 


PRESIDENT   OP  THE    UNITED   STATES.  131 

year  to  year  more  and  more  the  lot  of  the  laborers  of  all  cotton- 
producing  countries.  Such  are  the  necessary  results  of  the  system 
that  looks  to  cheapening  the  raw  materials  of  manufacture,  and  to 
increasing  the  difference  between  their  price  and  that  of  the  fin- 
ished commodities  into  which  they  are  converted. 

Eleven-twelfths,  or  fifty-five  millions  of  pounds,  are  divided 
among  middlemen  —  and  of  this  enormous  sum  four-fifths,  pro- 
bably, centre  in  the  owners  of  English  ships,  mills,  and  other 
machinery  of  exchange  and  transportation.  To  pay  this,  it  is 
required,  that  the  agricultural  nations  send  to  England  enormous 
quantities  of  tea,  coffee,  sugar,  indigo,  and  other  commodities  — 
while  themselves  wasting,  daily,  more  labor  than  is  employed, 
monthly,  in  all  the  mines  and  factories  of  the  United  Kingdom. 
Hence  their  inability  to  obtain  improved  machinery ;  and  hence 
the  necessity  they  are  everywhere  under,  of  confining  themselves 
to  the  work  of  scratching  out,  and  selling,  the  soil. 

The  direct  effect  of  the  reduction  in  the  price  of  cotton  has 
been,  and  is,  that  of  forcing  labor  into  the  production  of  sugar, 
with  similar  effect  —  enabling  the  people  of  England  to  obtain 
three  pounds  for  the  price  they  before  had  paid  for  one,  but  ruin- 
ing the  people  of  Jamaica.  The  decline  in  the  price  of  sugar 
forced  labor  into  the  production  of  coffee,  and  that,  in  its  turn, 
fell  in  price — there  being  a  solidarity  of  interest — of  prosperity , 
or  of  adversity — among  all  the  agriculturists  of  the  world.  Our 
farmers  and  those  of  Russia  and  Germany  were  injured  by  the 
stoppage  of  manufactures  in  Ireland,  because  it  had  the  effect  of 
diminishing  the  Irish  consumption  of  food,  and  forcing  large  quan- 
tities on  the  English  market.  The  planters  were  injured  by  it, 
because  it  not  only  stopped  the  consumption  of  cotton  among  the 
Irish  people  themselves,  but — by  forcing  large  quantities  of  labor 
upon  England  —  it  lessened  the  power  of  the  English  laborer  to 
consume  either  food  or  cotton.  That  all  communities  prosper  by 
the  prosperity  of  all  others,  and  that  all  suffer  from  injury  received 
by  others,  is  a  truth  that  will,  Mr.  President,  at  some  day,  come 
to  be  admitted  ;  and  when  it  shall  be  so,  the  farmers  and  planters 
of  the  world  will  be  found  combining  together  to  compel  the 
maintenance,  in  the  conduct  of  public  affairs,  of  a  sound  morality 
—  looking  to  the  advancement  of  the  interests  of  commerce,  and 
to  their  own  emancipation  from  the  tyranny  of  trade. 

So,  too,  is  it  with  the  laborers  of  the  world.  Whatever  tends 
to  impair  the  condition  of  those  of  India  is  injurious  to  those  of 
France  and  England  ;  and  therefore  it  is,  that  those  nations  would 
find  it  profitable  to  carry  out  in  their  international  relations  the 
same  morality  that  is  required  between  man  and  his  fellow-man. 
The  low  prices  of  sugar  and  cotton,  and  consequent  slavery  of 
the  producers  of  those  commodities,  are  but  consequences  of  the 
system  that  has  so  much  tended  towards  the.  enslavement  of  the 
workers  in  iron  and  cotton — that  one  which  has  sought  the  anni- 


132  LETTERS   TO   THE 

hilation  of  the  power  of  association  and  combination  everyvhere 
outside  of  Britain. 

What,  Mr.  President,  is  it,  that  the  British  manufacturers  de- 
sire ?  What  is  the  object  of  the  "warfare"  that,  as  we  are  told 
by  the  highest  British  authorities,  is  now  carried  on  against  the 
agricultural  nations  of  the  world  ?  —  Is  it  not,  that  of  cheapening 
raw  materials,  while  maintaining  at  their  highest,  the  prices  of  fin- 
ished commodities  ?  That  such  is  the  case,  cannot  be  denied. 

What  is  it,  on  the  other  hand,  that  our  farmers  and  planters 
desire  ?  Is  it  not  the  reverse  of  this  ?  Do  they  not  wish  to  have 
raw  products  dear,  and  finished  commodities  cheap  ?  That  they 
do  so,  is  certainly  true. 

What  is  the  policy,  Mr.  President,  advocated  by  the  foreign 
manufacturer  ?  Is  it  not  that  one,  which  is  commonly  called  free 
trade  ?  It  is  so,  certainly.  In  advocating  it,  does  he  desire  to 
carry  out  his  own  views,  or  those  of  the  planter  ?  Does  he  desire 
to  raise  the  price  of  food  and  cotton  ?  Does  he  not,  on  the  con- 
trary, desire  to  cheapen  both  ?  Does  he  desire  to  tax  himself,  for 
maintaining  the  millions  of  tons  of  shipping  required  for  carrying 
enormous  masses  of  raw  products  to  the  ports  of  Britain  ?  Does 
he  not,  on  the  contrary,  wish  to  throw  upon  the  producers  all  the 
cost  of  transportation  ?  Does  he  not  know,  and  feel  too,  that, 
under  that  system,  they  receive  the  most  trivial  share  of  their  pro- 
ducts—  the  remainder  being  absorbed  by  traders,  transporters, 
brokers,  and  middlemen  of  all  descriptions ;  and  is  it  not  for  these 
reasons,  that  he  urges  upon  the  world  the  adoption  of  the  free-trade 
system  ?  That  it  is  so,  is  unquestionably  true. 

The  objects  of  the  two  parties  being  thus  so  widely  different,  is 
it  possible  that  both  can  be  attained  by  the  pursuit  of  any  one  set 
of  measures  ?  Can  the  system  invented  for  the  purpose  of  depress- 
ing the  prices  of  raw  products  raise  them  ?  Can  that  which  looks 
to  maintaining  the  prices  of  finished  products,  lower  them  ?  It 
cannot ;  and  yet,  every  measure  of  our  central  government,  in  re- 
gard to  trade,  for  the  last  twelve  years,  has  had  the  fullest  appro- 
bation of  the  advocates  of  that  system.  Could  we  desire  better 
evidence,  that  those  measures  are  hostile  to  the  interests  of  both 
farmer  and  planter  ? 

The  more,  Mr.  President,  that  you  shall  study  the  subject,  the 
more  will  you  be  satisfied,  that  to  the  policy  of  that  government 
is  due  the  depression  in  the  prices  of  all  our  products,  to  which 
your  attention  has  been  called ;  and  that,  it  is  to  its  errors,  and 
not  to  excess  in  the  amount  of  power  retained  by  the  States,  when 
they  adopted  the  Constitution,  we  owe  the  monetary  difficulties 
you  have  so  well  described. 

Yours,  very  respectfully, 

HENRY  C.  CAREY. 
Philadelphia,  February  23d,  1858. 


PKESIDENT  OF  THE   UNITED   STATES.  133 


LETTER    TWENTY-THIRD. 

Two  systems,  Mr.  President,  are  before  the  world  —  one,  whose 
objects  are  to  be  promoted  by  increasing  the  competition  for 
the  sale  of  all  the  raw  materials  of  manufacture,  labor  included ; 
another,  which  looks  to  increasing  the  competition  for  their  pur- 
chase. 

The  first,  tends  towards  maintaining,  and  even  augmenting,  the 
necessity  for  machinery  for  transportation  —  thus  increasing  the 
influence  of  the  trader.  The  second,  would  promote  the  growth 
of  the  power  of  combination,  and  thus  diminish  the  necessity  for 
such  machinery  —  while  enlarging  the  field  of  commerce. 

The  first,  looks  to  widening  the  space  by  which  the  producer 
and  the  consumer  are  separated  ;  the  second,  to  its  contraction. 

The  one,  would  increase  the  difference  between  the  prices  of 
raw  materials  and  finished  commodities  ;  the  other,  would  secure 
their  more  close  approximation. 

The  one,  looks  to  increasing  the  proportion  of  mental  and  phy- 
sical power  given  to  trade  and  transportation,  and  thus  diminish- 
ing that  which  might  be  applied  to  production ;  the  other,  to  an 
increase  in  the  proportion  given  to  production,  and  a  diminution 
in  that  applied  to  effecting  changes  in  the  places  of  the  things 
produced. 

The  one,  was  reprobated  by  Adam  Smith ;  the  other,  is  in  full 
accordance  with  his  doctrines,  as  well  as  with  those  of  Colbert, 
the  most  distinguished  of  all  the  sons  of  France. 

Leader  in  the  advocacy  of  the  first  has  been,  and  is,  Great  Bri- 
tain. Leader  in  the  establishment  of  the  second,  and  most  con- 
sistent in  its  maintenance,  is  France ;  and  thus,  after  so  many 
ages  of  almost  ceaseless  efforts  to  do  each  other  injury,  by  means 
of  warlike  operations,  are  these  two  nations  now  engaged  in  a 
peaceful  contest  for  the  leadership  of  the  world  ;  but,  peaceful  as 
it  is,  it  is  destined  to  exert  an  amount  of  influence,  compared 
with  which  that  resulting  from  the  movements  of  fleets  and  armies 
in  the  past,  will  prove  to  have  been  entirely  insignificant. 

For  centuries,  both  have  been  almost  unceasingly  engaged  in 
war,  but  widely  different  have  been  the  objects  sought  to  be  at- 
tained—  France  having  fought  for  glory  and  dominion,  while 
England  has  looked  with  a  single  eye  to  the  establishment  of  the 
supremacy  of  trade.  Equally  different  have  been  their  respective 
policies  —  France  having  imitated  Rome,  who,  universal  plun- 
derer as  she  was,  left  the  local  arrangements  of  her  provinces  un- 
touched ;  while  Great  Britain  has  imitated  Holland,  in  seeking  to 
monopolize  the  machinery  of  trade  and  transportation,  and  thereby 
compelling  strangers  to  make  their  exchanges  in  her  single  market. 


134  LETTERS   TO   THE 

The  policy  of  the  one  has  been  that  of  the  soldier ;  that  of  the 
other  has  had  for  its  foundation,  the  single  idea  of  "buying  in  the 
cheapest,  and  selling  in  the  dearest  market." 

Colbert  wished  that  French  colonists  should  refine  their  own 
sugar  and  make  their  own  cloth.  England,  on  the  contrary  — 
desiring  that  the  "  mischievous  practice  "  might  be  prevented  — 
inserted  in  her  grants  of  land,  clauses  "  declaring  the  same  to  be 
void,"  should  the  grantee  "apply  himself  to  the  making  of  wool- 
len, or  such  like,  manufactures. "  Seeking  the  enlargement  of 
commerce,  France,  under  the  lead  of  Turgot,  abolished  the  mono- 
polies of  earlier  times;  while,  at  the  same  moment,  the  Parliament 
of  England  —  looking  always  towards  trade  —  was  adding,  year 
after  year,  to  the  restrictions  upon  the  movements  of  her  artisans, 
and  thus  creating  a  monopoly  to  be  held  against  the  world. 

The  system  of  the  one,  is  based  upon  the  idea  of  cheapening  the 
raw  produce  of  the  earth,  and  the  labor  of  him  by  whom  it  is  tilled. 
The  other,  seeks  to  protect  the  laborer,  by  bringing  the  market  to 
his  door,  and  thus  giving  value  to  his  land. 

The  closer  the  approximation  of  the  price  of  the  raw  material 
and  the  manufactured  commodity,  the  smaller,  necessarily,  is  the 
proportion  of  the  product  of  labor  appropriated  to  the  payment 
of  the  transporter,  the  trader,  the  soldier,  and  all  others  of  those 
classes  standing  between  the  men  who  labor  to  produce,  and  those 
who  need  to  consume  the  things  produced.  The  closer  that  ap- 
proximation, the  more  rapid  will  be  the  circulation,  the  more 
instant  the  demand  for  labor  and  its  products,  and  the  greater  the 
power  to  apply  the  faculties  of  mind  and  body  to  the  work  of  con- 
version —  while  giving  a  constantly  increasing  proportion  to  the 
labor  of  developing  the  riches  of  the  earth,  and  thus  augmenting 
the  quantity  of  things  susceptible  of  being  converted.  In  France, 
the  quantity  of  food  has  increased  twice  more  rapidly  than  the 
population  ;  and  yet,  her  manufacturing  industry  has  attained  such 
large  dimensions,  that  its  product  is  given  at  4,000,000,000  of 
francs,  or  nearly  $800,000,000* — being,  probably,  twice  the 
anjount  of  the  total  yield  of  land  and  labor,  a  century  since.  The 
movement,  too,  is  a  constantly  accelerated  one.  Forty  years  since, 
France  absorbed  but  60,000  bales  of  cotton  ;  now,  she  requires 
400,000.  Then,  the  whole  value  of  the  silks  manufactured,  but 
little  exceeded  100,000,000  of  francs  ;  now,  it  exceeds  400,000,000. 
Then,  she  made  but  little  iron  ;  now,  she  makes  more  than  500,000 
tons — being  as  much  as  was  produced  in  Britain,  thirty  years  since. 
Then,  her  mines  yielded  but  800,000  tons  of  coal ;  now,  the  quan- 
tity exceeds  5,000,000  —  having  sextupled  in  that  brief  period. 


*  This  sum  has  reference  to  the  additional  value  given  to  raw  products  by 
the  processes  of  manufacture,  and  is  not  to  be  understood  as  including  that 
of  the  materials  themselves.  The  total  amount  of  commodities  manufactured 
is  given  at  8,000,000,000  of  francs. 


PRESIDENT   OF   THE    UNITED   STATES.  135 

These  are  great  changes ;  and  yet,  so  far  are  they  from  having 
oeen  attended  with  diminution  in  the  proportion  of  physical  and 
mental  faculty  given  to  agriculture,  that  they  are  the  cause  of  a 
constant  increase  therein. 

A  century  since,  France  could  have  fed  with  wheat  seven  mil- 
lions of  people.  Now,  she  could  feed  more  than  twenty  millions.* 
Then,  the  corn,  potatoes,  and  other  vegetables,  if  equally  divided 
among  the  population,  would  have  given  about  800  pints  per  head. 
Now,  it  would  give  more  than  twice  that  quantity ;  and  of  the 
change  thus  manifested,  by  far  the  larger  portion  has  occurred  in 
the  forty  years  through  which  we  last  have  passed.  This,  Mr. 
President,  is  a  great  change,  and  yet  it  is  but  a  part  of  what  has 
been  effected.  The  policy  of  Colbert,  in  seeking  to  diversify  the 
modes  of  agricultural  employment,  having  been  carried  out  in 
reference  to  sugar,  the  result  is  seen  in  the  fact,  that  France  has 
now  more  than  a  hundred  thousand  acres  devoted  to  the  culture 
of  the  beet-root  —  producing  sugar  to  the  amount  of  sixty  or 
seventy  millions  of  francs,  equal  to  twelve  or  fourteen  millions  of 
dollars  ;  and  so  cheaply  is  it  supplied,  that  the  sugar  of  the  colo- 
nies finds  itself  forced  to  implore  protection  against  the  domestic 
manufacture. 

In  1812,  the  total  amount  of  silk  cocoons  produced  but  little 
exceeded  5,000,000  kilogrammes  ;  now,  it  exceeds  15,000,000, 
with  a  value  of  more  than  sixty  millions  of  francs,  or  twelve  mil- 
lions of  dollars. 

France  has  now  32,000,000  of  sheep,  against  27,000,000  in 
1813,  and  20,000,000  in  1789;  but  the  improvement  in  quality 
has  been  far  greater  than  that  in  quantity — the  demand  from  the 
constantly  growing  woollen  manufacture,  having  offered  a  large 
bounty  upon  the  devotion  of  time,  mind,  and  means,  to  the  im- 
provement of  the  race. 

Cloth  has  steadily  declined  in  price,  while  wool  has  much 
advanced  ;  and  the  corn  that,  a  century  since,  would  command  but 
twelve  and  a  half  francs,  was  worth  nineteen  francs  in  the  deceminal 
period  ending  in  1840.  The  prices  of  the  raw  material  and  of 
the  finished  commodity  are  steadily  approximating  each  other  — 
thus  affording  the  strongest  evidence  of  advance  in  civilization. 
The  consequences  of  the  increase  of  quantity,  and  of  price,  are 
seen  in  the  fact  that  whereas,  eighty  years  since,  the  average 
money-value  of  the  produce  of  an  acre  of  land  was  87£  francs,  it 
has  since  risen  to  no  less  than  237  —  having  almost  trebled. 

We  see,  thus,  Mr.  President,  that  much  of  the  augmented 
money-value  results  from  increase  in  quantity,  and  most  especially 
from  increase  in  those  bulky  products  of  the  earth,  that  will  not 

*  That  the  change  here  indicated  is  still  in  rapid  progress,  is  shown  bj 
the  fact  that  while  the  average  product  of  wheat  in  the  years  1842-1848  was 
only  72,000,000  hectolitres,  that  of  1847-1851  was  no  less  than  86,000,000. 


136  LETTERS   TO   THE 

,bear  transportation  to  distant  markets.  A  further  portion  of  it 
is  consequent  upon  the  increased  utility  of  many  portions  of  the 
produce,  resulting  from  the  existence  of  a  market  near  at  hand. 
Thus,  the  wheat-straw,  alone,  is  valued  at  393,000,000  of  francs, 
or  nearly  $80,000,000  ;  and  the  total  value  of  the  straw  of  France 
at  761,000,000  of  francs  =  $150,000,000 —being  more  than  the 
total  value  of  the  cotton  crop  of  the  United  States,  which  occu- 
pies so  nearly  exclusively  the  land  of  no  less  than  ten  of  our 
States,  and  furnishes  almost  the  whole  employment  of  so  many 
millions  of  people. 

As  a  general  rule,  France  feeds  herself.  In  thirty-three  years 
it  occurred  once  —  in  1847  —  that  her  imports  of  food  were  ade- 
quate to  the  supply  of  2,700,000  persons.  Twice  —  in  1832  and 
1846  —  she  imported  half  that  quantity.  Six  times,  her  imports 
sufficed  for  the  feeding  of  from  three  to  four  hundred  thousand 
persons ;  but  in  nineteen  of  the  thirty-three  years  her  imports  were 
insignificant. 

The  annual  average  of  her  exports,  in  the  ten  years  ending 
1836,  but  little  exceeded  500,000,000  of  francs.  In  1852,  the 
amount  was  1,250,000,000  —  being  an  augmentation  of  150  per 
cent.  ;  while  the  average  of  the  previous  five  years,  including 
those  disastrous  ones  of  1848  and  '49,  exceeded  1,000,000,000; 
and  yet,  large  as  was  the  increase,  nearly  the  whole  amount  of 
labor  thus  exported,  directly  represented  food  produced  on  the 
soil  of  France.  How  small  is  the  quantity  of  foreign  raw  mate- 
rial that  goes  to  the  production  of  the  goods  exported,  is  shown 
by  the  fact,  that  while  the  value  of  cotton  fabrics  exported  in  1854 
was  60,000,000  of  francs,  the  weight  was  only  7,300,000  kilo- 
grammes, or  16,000,000  of  pounds — giving  an  average  of  seventy- 
five  cents  for  the  raw  cotton  that  had  passed  into  the  hands  of 
the  manufacturer  at  an  average  price,  not  exceeding  ten.  The 
total  weight  of  clothing  and  furniture  exported  in  1856  was  under 
40,000  tons  —  a  quantity  that,  as  you  have  seen,  Mr.  President, 
could  be  carried  in  forty  ships  of  very  moderate  size  ;  and  yet,  in 
that  small  bulk  was  contained  little  less  than  two  hundred  millions 
of  dollars'  worth  of  French  food,  so  condensed,  in  accordance  with 
the  ideas  of  Adam  Smith,  as  to  enable  it  freely  to  travel  to  .the 
remotest  corners  of  the  world. 

The  tendency  of  French  policy  is  that  of  making  manufactures 
subsidiary  to  agriculture  —  combining  a  small  amount  of  foreign 
raw  materials  with  a  large  quantity  of  domestic  ones,  and  thus 
enabling  her  farmers  cheaply  to  maintain  commerce  with  distant 
countries.  Scarcely  any  thing  passes  out  until  it  has  attained  a 
form  so  high,  as  to  cause  the  skill  and  taste,  which  represent  her 
food,  to  bear  a  very  large  proportion  to  the  value  of  the  raw 
material  that  is  used.  Her  exports  of  raw  produce  are  insignifi- 
cant in  amount ;  and  even  of  wine,  the  amount  exported  but  little 
exceeds  that  of  the  years  immediately  preceding  the  Revolution  — 


PKESIDENT   OF   THE   UNITED   STATES.  137 

the  average  from  1844  to  1846  having  been  only  1,401,800  hecto- 
litres, against  1,247,700  tons  from  1787  to  1789. 

The  total  value  of  French  produce  and  manufactures  exported 
in  1856  was  1,893,000,000  francs,  or  $370,000,000;  and  of  this 
large  sum,  the  foreign  raw  materials  could  scarcely  much  have  ex- 
ceeded, even  if  they  equalled,  a  fifth  —  leaving  1,500,000,000 
of  francs  as  the  actual  value  of  food  and  other  domestic  products 
furnished  to  the  world,  after  having  been  reduced  in  bulk,  so  as  to 
economize  to  the  utmost  extent,  the  cost  of  transportation.  Land 
and  labor  rise  in  value  precisely  as  they  are  emancipated  from 
that  first  and  most  oppressive  of  taxes  ;  and  therefore  it  is,  that 
we  witness  so  large  an  increase  in  the  price  of  those  of  France. 

In  1821,  her  real  estate  was  valued,  and  the  amount  re- 
turned to  the  government  was  39,514,000,000  francs,  or  nearly 
$8,000,000,000.  A  similar  valuation  having  been  made  in  1851, 
and  before  the  California  gold  deposits  had  begun  to  affect  the 
movements  of  the  world,  the  amount  was  found  to  have  risen  to 
no  less  than  83,744,000,000  francs,  or  $16,000,000,000— having 
more  than  doubled  in  the  short  period  of  thirty  years.  In  the 
same  year,  the  total  value  of  the  real  estate  of  the  Union  was  re- 
turned at  $3,889,000,000;  but,  as  subsequently  corrected  at  the 
Census  bureau,  it  was  increased  to  nearly  $5,000,000,000  —  that 
having  been  given,  as  the  true  value  of  all  the  land  and  buildings 
of  the  country.  Were  we  now  to  add  to  this,  even  sixty  per  cent., 
we  should  obtain  a  sum  no  greater  than  that  which  represents  the 
addition  made  to  the  value  of  the  real  estate  of  France,  in  thirty 
years.  It  follows  thence,  Mr.  President,  that  the  fixed  property 
here  created,  in  the  whole  period  that  has  elapsed  since  the  land- 
ing of  the  Pilgrims,  is  far  less  in  value  than  that  created  by  the 
French  people,  in  the  brief  period  you  have  so  well  described,  of 
constantly  repeated  financial  convulsions  among  ourselves. 

This  is,  certainly,  a  most  extraordinary  fact,  and  it  behoves  us, 
Mr.  President,  to  inquire  into  the  causes  of  its  existence.  In 
that  period,  France  has  maintained  armies  that  have  counted  by 
hundreds  of  thousands,  while  ours  have  counted  by  thousands. 
She  has  made  wars  in  Europe  and  Africa ;  while,  with  the  excep- 
tion of  our  discreditable  attack  on  Mexico,  we  have  enjoyed  a 
peace  that  has  been  undisturbed.  She  has  undergone  a  succes- 
sion of  violent  revolutions ;  we  have  had  none  but  those  resulting 
from  the  operation  of  the  ballot-box.  Her  land  has  been  oppres- 
sively taxed  for  the  maintenance  of  fleets  and  armies,  admirals 
and  generals,  kings  and  emperors ;  whereas,  ours  has  not  been 
taxed  for  a  single  dollar,  to  be  applied  to  the  purposes  of  the  cen- 
tral government.  Nevertheless,  the  land  of  France  so  steadily 
rises  in  value,  that  it  would  now  command  thrice  as  large  an 
amount  of  money  as  could  be  obtained  for  all  the  real  estate  of 
our  Union. 

Why,  Mr.  President,  is  it  so  ?    Because,  French  policy  looks 


138  LETTERS   TO   THE 

to  relieving  the  farmer  from  the  tax  of  transportation,  and  thus 
giving  value  to  the  land,  and  the  man  by  whom  it  is  cultivated ; 
while  ours  looks  to  increasing  that  tax,  and  destroying  the  value 
of  laud.  —  Because,  the  one  looks  to  increasing  the  power  of  asso- 
ciation and  combination  ;  while  the  other  looks  to  its  destruction. 
Because,  the  one  looks  to  diversifying  the  pursuits  of  the  people  ; 
while  the  other  seeks,  as  far  as  possible,  to  limit  the  whole  community 
to  the  pursuits  of  scratching  the  earth,  on  one  side,  and  trade  and 
transportation,  on  the  other.  Because,  the  one  would  tend  to  create 
a  scientific  agriculture,  and  to  promote  demand  for  all  the  powers 
of  THE  MAN  ;  while  the  other  seeks  to  limit  the  demands  upon  its 
people,  to  brute  force,  on  one  side,  and  craft  on  the  other.  Be- 
cause, the  one  looks  to  increasing  the  products  of  the  land,  while 
augmenting  their  prices ;  and  the  other,  to  diminishing  the  yield, 
while  lessening  the  prices  of  the  things  produced.  Because,  the 
one  enables  the  people  subject  to  it,  to  import  the  precious  metals ; 
while,  the  other  compels  their  exportation.  Because,  the  one 
looks  towards  raising  the  value  of  the  laborer,  and  making  him 
more  free ;  while,  the  other  tends  towards  diminishing  his  value, 
and  thus  making  the  slavery  of  the  white  man  and  the  black,  the 
law  of  the  land.  Because,  the  one  seeks  to  establish  the  indepen- 
dence of  both  the  people  and  the  state ;  while  under  the  other, 
colonial  dependence  grows  from  year  to  year.  Because,  finally, 
the  one  looks  to  the  extension  of  that  domestic  commerce  which, 
as  you  have  so  distinctly  seen,  is  the  only  sure  foundation  of  a 
great  foreign  one ;  while  those  to  whom  we  owe  the  other,  have 
dreamed  of  the  erection  of  a  great  foreign  commerce,  upon  the 
ruins  of  a  domestic  one. 

The  more,  Mr.  President,  you  study  the  commercial  movement 
of  France,  the  more  you  will  be  satisfied  of  the  accuracy  of  your 
views  as  to  the  sort  of  free  trade  that  is  really  needed  by  your 
countrymen ;  that  sort  which  is  required  for  giving  wealth  to  the 
people,  and  strength  to  the  government. 
With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  February  26th,  1858. 


PRESIDENT   OF   THE   UNITED   STATES.  139 


LETTER    TWENTY-FOURTH. 

THAT  men,  Mr.  President,  become  more  independent  in  their 
actions,  and  more  free  to  combine  their  efforts  with  their  fellow- 
men,  as  their  faculties  become  more  and  more  developed,  is  a 
truth,  whose  evidence  may  everywhere  be  found.  So,  too,  is  it 
with  communities  —  their  independence  of  external  action  grow- 
ing in  the  direct  ratio  of  the  variety  in  the  demand  for  human 
faculty  among  themselves.  Tor  proof  that  such  is  the  case,  we 
may  now,  for  a  moment,  look  to  the  working  of  the  English  and 
French  systems — the  one  based  upon  the  idea  of  extending  foreign 
trade,  at  every  cost  to  domestic  commerce ;  and  the  other,  upon 
that  of  creating  a  great  internal  commerce,  as  the  sure  foundation 
of  a  profitable  intercourse  with  other  nations. 

That  the  total  number  of  persons  of  all  descriptions,  employed 
in  Great  Britain  in  converting  cotton  into  yarn,  and  in  making 
the  inferior  cloths,  the  pig  iron,  the  earthenware,  and  other  similar 
commodities,  by  means  of  which  that  country  not  only  pays  for 
all  the  supplies  required  for  her  numerous  population,  but  is  ena- 
bled also  to  bring  their  producers  so  much  in  debt,  does  not 
exceed  half  a  million,  is  quite  certain.  That  large  quantities 
of  produce  are  there  received,  and  that  very  little  is  given  in 
.  return,  is  a  fact  that  does  not  admit  of  doubt ;  and  one,  too,  the 
conviction  of  whose  existence  must,  sooner  or  later,  force  itself 
upon  the  agricultural  communities  of  the  world.  Were  it  now 
fully  understood,  and  were  those  communities  to  arrive  at  the 
conclusion,  that  they  might  as  well  mine  and  smelt  their  own  ores, 
twist  and  weave  their  own  cotton,  and  make  their  own  earthen- 
ware, at  the  same  time  saying  to  those  few  people — "Come 
among  us  and  mine  ore,  make  iron,  spin  thread,  and  weave  cloth  ;" 
and  —  that  having  been  done  —  were  they  to  have  the  work  per- 
formed at  home,  that  they  now  have  done  in  England,  the  effect 
would  be,  that  instead  of  feeding  four  millions  of  people,  they 
would  have  but  half  a  million  to  feed  ;  and  instead  of  giving  such 
prodigious  masses  of  cotton,  sugar,  coffee,  lumber,  dye-stuffs, 
and  other  raw  products,  in  exchange  for  a  little  cloth,  and  very 
little  iron,  they  would  have  the  whole  of  that  immense  quantity 
to  apply  to  the  purchase  of  improved  machinery,  or  to  that  of 
the  comforts  and  luxuries  of  life.  Such  an  operation  would 
require  but  few  years  for  its  accomplishment,  and  for  the  rea- 
son, that  the  British  system,  based  as  it  is  upon  the  idea  of 
cheapening  labor,  has  little  tendency  to  create  demand  for  any- 
thing beyond  mere  muscular  force.  Dreading  a  competition  that 
could  so  readily  be  established,  Great  Britain  is  entirely  de- 


140 


LETTERS   TO    THE 


pendent,  for  the  maintenance  of  her  power,  upon  the  peaceful 
submission  of  the  agricultural  communities,  to  the  system  of 
trading:  warfare,  that,  as  you  have  seen,  Mr.  President,  has  beea 
established  ;  established,  too,  in  full  accordance  with  the  decla- 
rations of  some  of  the  most  eminent  statesmen  of  England,  in 
reference  to  "the  necessity  for  strangling  in  their  infancy"  all 
attempts  at  competition  with  British  makers  of  cloth  and  iron. 

What,  however,  would  be  the  effect  upon  France  of  a  change 
of  policy,  looking  to  full  protection,  on  the  part  of  Ireland,  Tur- 
key, Portugal,  Brazil,  India,  the  United  States,  and  other  coun- 
tries ?  Would  she  be  placed  in  a  similar  position  ?  She  would 
not,  because  her  policy  is  that  of  thoroughly  elaborating  and  per- 
fecting her  own  rude  products,  and  those  of  other  lands  received 
in  exchange.  With  her,  the  value  of  the  raw  material  bears  but 
a  small  proportion  to  that  of  the  finished  commodity  ;  and  while 
she  sends  to  the  world  the  finest  silks  and  cloths,  wines  and  por- 
celain, her  rival  exports  cotton-twist,  blankets,  coal,  pig  and  bar 
iron,  beer,  and  earthenware.  The  one  aspires  to  lead  the  world, 
while  the  other  seeks  to  underwork  it.  In  the  one,  artistic  taste 
is  being  from  day  to  day  more  fully  stimulated  into  activity ; 
whereas,  in  the  other,  the  tendency  towards  making  of  man  a 
mere  machine,  increases  from  year  to  year.  The  one  looks  to  the 
cheapening  of  labor  and  land ;  whereas,  the  policy  of  the  other 
tends  towards  raising  the  price  of  both. 

Those  who  desired  to  supersede  the  one,  would  require  only  the 
lowest  description  of  manufacturing  skill — to  be  acquired  in  the 
briefest  period ;  whereas,  those  who  sought  to  supplant  the  other, 
would  need  a  skill  to  be  acquired  only  at  the  cost  of  very  many 
years  of  application ;  and  a  taste,  for  the  development  of  which 
would  be  required  a  ready  access  to  works  of  art ;  and,  whatever 
might  be  their  progress,  France  would  still  continue  in  advance. 

In  proof  that  such  would  be  the  case,  we  need  only  take  the 
tables  of  exports  —  doing  which,  we  find  that  France  finds  her 
customers  chiefly  in  those  countries  that  are  already  largely  manu- 
facturing, and  that  are,  themselves,  anxious  to  compete  with  her, 
to  wit :  — 


England 250,000,000  francs. 

United  States....  162,000,000     " 

Belgium 121,000,000     " 

Sardinia 72,000,000     " 

Spain 65,000,000     " 


Switzerland 58,000,000  francs. 

Zoll-Verein  42,000,000     « 

Russia 14,000,000     " 

Hanseatic  Cities.  13,000,000     " 
Holland 15,000,000     " 


Adding  to  these  the  colony  of  Algeria,  103,000,000,  we  have 
905,000,000  exported  in  1852 — leaving  345,000,000  for  the  rest 
of  the  world  ;  and  nearly  all  that  balance  is  so  divided,  as  to  show 
that  France  is,  everywhere,  ministering  to  the  tastes  of  the  more 
refined  portions  of  the  various  communities  of  the  world.  So  far, 
therefore,  is  she  from  fearing  competition,  that  she  has  reason  to 


PRESIDENT   OF  THE   UNITED   STATES.  141 

desire  it  —  knowing  that  with  every  increase  in  the  power,  any- 
where, to  make  cotton  and  woollen  cloths,  and  iron,  there  arises 
an  increased  demand  upon  her  workshops,  for  commodities  re- 
quiring that  high  development  of  the  artistic  faculty,  which  she 
alone  can  furnish. 

Turning  to  England,  we  find  that  her  exports,  in  the  same  year, 
to  the  advancing  portions  of  Europe,  that  is  to  say — 

To  Europe,  exclusive  of  Turkey,  Italy,  and  Portugal  —  amount 

to  only £19,000,000 

While  the  raw  material  that  has  undergone  the  single  process 
of  twisting,  and  that  goes  only  to  manufacturing  countries 
amounts,  alone,  to £10,000,000 

Adding  to  this,  the  unmanufactured  metals,  and  the  coal,  sent  to 
those  countries,  we  shall  obtain  almost  all  the  balance  —  England 
having,  in  fact,  but  little  to  send  to  any  country  that  is  itself 
advancing  in  civilization. 

To  this  country,  the  exports  were  more  than  £16,000,000  ;  but 
of  this,  nearly  the  whole  amount  consisted  in  common  cottons  and 
woollens,  iron,  and  other  articles  requiring  little  skill  or  taste ; 
while  from  France  were  imported  nearly  all  of  those  in  the  pre- 
paration of  which  artistic  skill  was  manifested.  Deducting  the 
two  quantities  above  referred  to,  there  now  remain  no  less  than 
£38,000,000,  or  more  than  half  of  the  whole,  for  India,  Australia, 
Portugal,  Turkey,  Buenos  Ayrcs,  Mexico,  and  other  countries, 
in  which  there  exist  few  manufactures  ;  and  in  which,  consequently, 
are  found  the  evidences  of  barbarism — raw  materials  being  cheap, 
while  finished  commodities  are  dear. 

The  French  system  is  based  upon  the  idea  of  the  enlargement 
of  commerce — resulting  fromHhe  compression  of  raw  commodities 
into  their  smallest  form ;  and  from  the^  emancipation  of  the  farmer 
from  the  tax  of  transportation.  Commerce  grows  with  the  growth 
of  the  powers  of  man  ;  and  therefore  would  France  profit  by  the 
adoption  in  other  countries,  of  the  system  that  has  so  well  been 
carried  out  at  home. 

The  English  system  is  based  on  the  idea  of  the  supremacy  of 
trade,  and  the  augmentation  of  the  tax  of  transportation.  Trade 
grows  with  the  growth  of  man's  necessities;  and  therefore  would 
England  suffer  under  any  system  leading,  in  other  countries,  to 
development  of  the  faculties,  and  increase  in  the  powers,  of  man. 

Such  being  the  case,  we  can  now  readily  account  for  the  steadi- 
ness of  the  commercial  policy  of  the  one,  notwithstanding  the 
shocks  of  repeated  revolutions ;  and  for  the  exceeding  unsteadi- 
ness of  the  trading  policy  of  the  other,  although  political  revolu- 
tions are  there  unknown.  The  one,  after  long  experience,  has 
recently  announced  to  the  world,  through  the  President  of  the 
Council,  M.  Baroche,  its  determination  "formally"  to  "reject 
the  principle  of  free  trade,  as  incompatible  with  the  independence 


142  LETTERS   TO   THE 

and  security  of  a  great  nation,  and  as  destructive  of  her  noblest 
manufactures.  No  doubt,"  as  he  continued,  "our  customs  tariffs 
contain  useless  and  antiquated  prohibitions,  and  we  think  they 
must  be  removed.  But  protection  is  necessary  to  our  manufac- 
tures. This  protection  must  not  be  blind,  unchangeable,  or  ex- 
cessive;  but  the  principle  of  it  must  be  firmly  maintained." 
The  other,  on  the  contrary,  has  changed  its  system  repeatedly, 
and  especially  within  the  last  five-and-thirty  years.  Until  1825, 
it  had  gone  on  heaping  protection  upon  protection  ;  but  since 
that  time,  its  policy  has  been  altered  and  re-altered,  until  the 
form  of  the  existing  one,  bears  hardly  the  slightest  resemblance 
to  that  of  the  days  of  George  III.,  although  the  spirit  remains 
the  same. 

The  one  is  quiet,  tranquil,  and  confident,  in  its  forward  move- 
ment ;  whereas,  the  other,  restless  and  doubtful,  is  unceasingly 
engaged  in  wars  for  the  extension  of  trade ;  military  wars,  carried 
on  by  soldiers  and  sailors,  admirals  and  generals ;  and  trading 
wars  carried  on  by  means  of  "large  capitals"  so  directed  as  to 
crush  but  competition,  abroad  or  at  home. 

The  one  is  rapidly  becoming  the  leader  of  the  advancing  nations 
of  Europe ;  whereas,  the  other  is  gradually  surrounding  itself  with 
the  ruins  of  once-important  nations,  that  have  been  its  friends. 

The  policy  of  the  one  is  in  accordance  with  the  views  of  its  own 
illustrious  Colbert;  and  with  those  of  Adam  Smith,  when  teach- 
ing that  "  that  country  in  whpse  cargoes  there  is  the  greatest  pro- 
portion of  native,  and  the  least  of  foreign,  goods,  will  always  be 
the  principal  gainer."  The  other  is  in  harmony  with  the  doc- 
trines of  Sir  Robert  Peel,  who  taught  that  England's  governing 
principle  should  be  found,  in  the  single  determination  to  "  buy  in 
the  cheapest  market,  and  sell  in  the  dearest  one  " — buying  labor, 
at  home  and  abroad,  at  a  low  price,  and  selling  it,  both  at  home 
and  abroad,  at  a  high  one.  The  one  looks  to  the  elevation  and 
enfranchisement  of  man ;  the  other,  to  the  subjection  of  the  laborer 
to  the  trader,  and  to  his  ultimate  enslavement. 

What,  now,  Mr.  President,  is  our  condition,  as  compared  with 
that  of  France  ?  Can  we  maintain  commerce  where  we  will  ? 
Are  we  not,  on  the  contrary,  forced  to  go  where  we  must  ?  Can 
we  send  wheat,  or  corn,  to  the  people  of  California,  or  Australia  ? 
Do  those  of  Brazil,  or  India,  desire  to  purchase  rice  or  cotton  ? 
Assuredly  not — their  demands  upon  the  outer  world  being  for 
finished  commodities,  and  not  for  the  rude  products  of  the  soil. 
How,  then,  do  we  maintain  commerce  with  Brazil  and  California  ? 
Is  it  not  by  the  circuitous  route  of  Manchester  and  Lyons  —  the 
whole  of  the  tax  of  transportation  being  paid  by  the  farmers  and 
planters  of  the  Union?  That  it  is  so,  cannot  be  questioned. 

France,  on  the  contrary,  sends  the  rude  products  of  her  soil  to 
every  country  of  the  world  —  having  first  combined  tons  of  corn 
and  potatoes  with  pounds  tof  silk  and  cotton,  clay  and  gold,  in 


PRESIDENT   OF   THE    UNITED    STATES.  143 

accordance  with  the  advice  of  Adam  Smith.  Sending  hundreds 
of  millions,  in  value,  compressed  into  tens  of  thousands  of  tons,  in 
bulk,  she  is  enabled  to  throw  upon  those  who  send  her  raw  mate- 
rials, all  the  cost  of  transportation,  while  establishing,  from  year 
to  year,  an  independence  more  complete.  We,  on  the  contrary, 
forced  to  maintain  commerce  with  the  world,  through  the  medium 
of  foreign  ships  and  mills,  become  daily  more  and  more  dependent. 
Why,  Mr.  President,  is  it  so  ?  Because  the  central  government  — 
refusing  to  perform  the  duties  devolved  upon  it  by  the  States  — 
limits  its  views  to  its  own  protection,  and  neglects  the  protection 
of  the  people. 

As  a  consequence  of  this  unhappy  state  of  things  it  is,  that  the 
planter  is  compelled  to  pray  for  short  crops  instead  of  large  ones. 
With  the  one  —  freights  being  low,  while  prices  are  high  —  he  is 
enriched.  With  the  other  —  freights  being  high,  and  prices  low — 
he  is  impoverished.  So,  too,  with  our  farmers,  dependent,  as 
they  everywhere  are,  upon  the  trivial  demand  of  Europe,  conse- 
quent upon  short  crops  in  England,  France,  or  Germany.  Give 
them  that  great  domestic  commerce,  the  need  of  which  is  to  your- 
self, Mr.  President,  so  very  evident — that  commerce  which  France 
so  rapidly  obtains  —  and  they  will,  then,  be  enabled  to  rejoice  in 
the  prosperity  of  the  agricultural  interest  everywhere. 

Hoping  that  by  aid  of  reforms  to  be  initiated  by  yourself,  our 
farmers  and  planters  may  be  enabled  to  obtain  that  free  inter- 
course among  themselves,  and  with  the  outside  world,  of  which 
they  have  been  so  long  deprived,  I  remain,  Mr.  President, 
With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  March  3rd,  1858. 


144  LETTEKS   TO   THE 


LETTER   TWENTY-FIFTH. 

WE  are  constantly  assured,  Mr.  President,  that  the  protective 
system,  favorable  as  it  may  be  to  commerce  at  home,  tends  to  the 
annihilation  of  foreign  commerce.  All  the  facts  of  history  tend, 
however,  to  prove  the  reverse  of  this  —  the  power  to  maintain 
intercourse  with  foreign  nations  having  always  grown  with  the 
growth  of  domestic  commerce,  and  it  having  been  by  the  latter's 
help,  alone,  that  the  former  has  been  maintained.  The  great  de- 
velopment of  British  external  commerce  followed  that  of  the  inter- 
nal one,  which  owed  its  existence  to  a  protective  system  of  the 
most  stringent  character.  So,  too,  has  it  been,  with  all  the  pro- 
tected countries  of  Europe  —  the  power  to  maintain  exterior  com- 
merce having,  everywhere,  followed  the  adoption  of  measures 
looking  to  the  development  of  an  internal  one,  as  is  shown  by  the 
following  facts  :  — 

From  1826  to  1835,  as  we  have  seen,  the  domestic  exports  of 
France  averaged  only  500,000,000  francs;  from  1845  to  1849, 
they  averaged  1,000,000,000  ;  and  in  1856,  they  had  attained  the 
enormous  amount  of  1,893,000,000  —  having  almost  quadrupled 
in  the  five-and-twenty  years,  during  which  we  have  been  subjected 
to  such  repeated  crises,  consequent  upon  the  determination  of  the 
Federal  government  to  secure  to  itself  the  control  of  the  local 
banks  and  their  circulation. 

In  the  free-trade  period  of  Russia,  from  1814  to  1824,  the  quan- 
tity of  foreign  merchandise  consumed  averaged  only  $32,000,000 
a  year.  Growing  gradually,  by  aid  of  highly  protective  measures, 
the  power  of  that  country  to  be  a  customer  to  foreign  nations,  had 
risen,  at  the  opening  of  the  Crimean  war,  to  $75,000,000. 

The  domestic  exports  of  Belgium,  in  1828,  amounted  to  only 
156,000,000  francs.  By  1850,  they  had  become  263,000,000. 
In  1856,  they  were  375,000,000  —  the  exports  of  food  from  that 
little  country,  with  its  four  and  a  half  millions  of  people,  having, 
thus,  been  greater  than  our  own  average,  in  the  decade  ending  in 
1855  —  embracing,  as  it  did,  the  periods  of  the  Irish  famine,  and 
the  short  crops  of  Germany  and  France.  Belgium  follows  the 
advice  of  Adam  Smith,  in  combining  her  food  and  wool  in  the 
form  of  cloth,  and  thus  enabling  it  to  travel  cheaply  to  the  most 
distant  countries.  We  repudiate  it,  and  hence  the  inability  of  our 
farmers  to  maintain  commerce  with  the  world. 

Spain,  impoverished  as  she  has  been,  by  the  ' '  warfare ' '  of  the 
smugglers  of  Gibraltar,  and  by  repeated  revolutions,  increased 
her  exports  from  71,000,000  reals,  in  1827,  to  166,000,000,  in 
1852 


PRESIDENT   OF  THE   UNITED   STATES.  145 

Why  it  is,  Mr.  President,  that  such  have  been  the  uniform 
effects  of  the  adoption  of  a  system  looking  to  the  protection  of  the 
farmer  in  his  efforts  to  bring  the  consumer  to  his  side,  and  thus 
relieve  himself  from  the  tax  of  transportation,  will  readily  be  un- 
derstood by  all  who  study  the  following  facts,  in  reference  to  the 
highly  protected  country  of  the  Zoll-  Verein :  — 

Forty  years  since,  Great  Britain  received  from  Germany  only 
3,000,000  of  pounds  of  wool;  but,  with  the  decline  of  German 
manufactures,  the  export  of  raw  materials  so  largely  increased, 
that,  in  1825,  the  receipts  in  England,  from  that  source  alone, 
amounted  to  no  less  than  28,000,000  —  a  large  portion  of  which 
was  paid  for  in  English  cloth.  Such  having  been  the  state  of  the 
trade,  it  follows,  necessarily,  that  wool  in  Germany  must  have  been 
cheaper  than  in  England,  while  cloth  must  have  been  dearer — the 
prices  of  the  two  having  been  widely  distant  from  each  other. 

In  1851,  the  quantity  of  wool,  and  woollen  yarn,  imported  into 
Germany,  amounted  to  34,000,000  of  pounds,  and  the  quantity 
exported  to  9,000,000  — leaving  not  less  than  25,000,000  as  the 
net  import,  and  proving  that  wool  in  Germany  must  have  been 
higher  than  in  other  countries.  In  the  same  year,  the  quantity 
of  woollen  cloth  exported,  amounted  to  12,000,000  of  pounds  — 
proving  that  it  must  have  become  cheaper  than  in  other  countries. 
The  prices  of  raw  material  and  finished  articles  had  steadily  ap- 
proximated to  each  other,  and  thus  was  furnished  the  most  con- 
clusive evidence  of  advancing  civilization. 

Two-and-twenty  years  since,  the  import  of  cotton,  and  yarn,  into 
Prussia,  amounted  to  16,000,000  of  pounds  —  having  increased, 
in  the  twelve  years  that  had  then  elapsed,  but  6,000,000.  The 
movement  in  the  Zoll-  Verein,  in  the  period  that  has  since  elapsed, 
is  thus  given  :  — 

1836.  f  1845.  1851. 

Cotton 152,364  cwts 443,847  cwts 691,796  cwts. 

Cotton  twist 244.869     "  ..  574.303     "  ..  676.000     " 


397,233  cwts.         1,018,150  cwts.         1,362,796  cwts. 

The  export  of  yarn  and  cloth,  in  this  latter  year,  amounted  to 
159,241  hundredweights,  leaving  for  domestic  consumption  more 
than  1,200,000  hundredweights,  or  130,000,000  of  pounds  —  this 
proving,  first,  that  cotton  cloth  had  become  very  cheap  ;  second, 
that  the  power  of  consumption,  among  the  agricultural  population, 
had  largely  increased.  That  increase  was  a  necessary  consequence 
of  the  enlargement  of  the  market  for  labor,  and  for  the  products 
of  land,  resulting  from  the  extension  of  this  manufacture.  The 
weight  of  cotton  goods  exported,  was,  as  we  see,  less  than  an 
eighth  of  that  of  the  wool  and  yarn  imported  ;  and  yet,  the  value 
of  that  small  quantity,  was  20,000,000  of  thalers  =  $15,000,000 
—  being  almost  enough  to  pay  for  the  whole  import.  At  least 
10 


146  LETTERS   TO   THE 

three-fourths  of  this  large  sum  consisted  of  labor  representing 
German  food,  thus  enabled  readily  to  go  to  distant  countries. 

Thirty  years  since,  Germany  supplied  the  world  with  rags,  and 
imported  paper,  of  which  her  consumption  was  then  but  small. 
In  1851,  all  had  changed ;  the  net  import  of  the  first  having  been 
37,000,000  of  pounds,  while  the  net  export  of  paper  had  risen 
to  3,500,000.  In  the  first  period,  rags  were  cheaper  than  in  other 
countries,  while  paper  was  dearer.  In  the  second,  rags  were 
dearer,  while  paper  was  cheaper.  The  prices  of  the  two  had 
greatly  approximated  ;  and  therefore  had  the  consumption  of 
paper  so  much  increased  as  to  absorb  not  only  the  whole  quantity 
produced  at  home,  but,  in  addition  thereto,  more  than  30,000,000 
pounds  produced  abroad.  You  will,  Mr.  President,  more  fully 
appreciate  the  value  of  these  facts,  when  you  reflect  how  large 
must  have  been  the  domestic  production  of  rags,  resulting  from  an 
addition  to  the  consumption  of  cotton  amounting  to  more  than 
100,000,000  of  pounds  weight. 

In  1830,  the  quantity  of  coal  that  was  mined  was  but  7,000,000 
tonnes  —  and  adding  thereto  1,200,000  of  brown  coal,  we  have 
a  total  of  8,200,000.  In  1854,  the  first  had  increased  to 
34,000,000,  and  the  last  to  12,000.000  — making  a  total  of 
46,000,000. 

In  1834,  there  were  made  76,000  tons  of  bar  iron.  In  1850, 
the  quantity  had  risen  to  200,000  ;  and  the  pig  iron  that  was 
made  amounted  to  600,000  tons.  The  present  consumption  of 
the  Zoll-  Verein  is  given  at  fifty  pounds  per  head,  per  annum  — 
being  more  than  in  any  country  of  Europe  except  France  and 
Belgium  ;  and  more  than  in  any  country  of  the  world,  except  the 
two  already  named,  Great  Britain,  and  the  United  States.  It  is, 
however,  the  first  step  that  is  always  the  most  costly,  and  the 
least  productive.  Every  furnace  that  is  built,  and  every  mine 
that  is  opened,  tends  to  promote  further  progress  in  the  same 
direction — each  and  every  of  them  tending  to  promote  association 
and  combination.  In  1849,  not  a  furnace  was  to  be  seen  in  the 
neighborhood  of  Minden,  in  Westphalia,  but  "now,"  says  a  re- 
cent traveller,  "they  stand  like  towers  about  the  broad  plain" — 
making  a  vast  demand  for  food,  clothing,  and  labor.  Of  the  80 
copper-mines  of  Prussia,  no  less  than  24  have  been  opened  within 
the  last  few  years.  Every  mine,  every  furnace,  and  every  mill, 
aids  in  the  creation  of  new  roads,  and  the  improvement  of  old 
ones — -facilitating  the  opening  of  new  mines,  the  utilization  of  the 
powers  of  nature,  and  the  development  of  mind  ;  and  thus  in- 
creasing the  value  of  man,  while  diminishing  that  of  all  the  com- 
modities required  for  his  use. 

The  value  of  cotton  and  woollen  goods  exported  in  1851,  was 
30,000,000  of  thalers  =  $25,000,000  — the  chief  part  of  which 
large  sum,  consisted  of  the  food  that  had  been  combined  with  the 
labor,  in  the  process  of  converting  it  into  cloth.  As  a  consequence 


PRESIDENT   OF   THE   UNITED    STATES.  147 

of  this,  the  necessity  for  going  abroad  to  find  a  market  for  food 
had  so  greatly  decreased,  that  the  net  export  from  the  country 
that  only  thirty  years  since  was  the  granary  of  Europe,  was  but 
10, 000,000  bushels. 

Look  where  we  may,  Mr.  President,  we  meet  with  evidence  of 
the  fact,  that  the  power  to  maintain  a  profitable  foreign  commerce 
grows  with  the  growth  of  the  domestic  market  for  food,  wool,  and 
laborers,  and  the  consequent  diminution  of  the  exhausting  taxes 
of  trade  and  transportation.  Look,  too,  where  we  may,  we  meet 
with  evidence  of  the  necessity  for  protection,  as  the  only  means 
by  which  a  great  domestic  commerce  can  be  created ;  and  of  your 
own  perfect  accuracy  in  regarding  that  commerce  as  the  thing  we 
really  need  —  it  being  the  only  sure  foundation  of  an  extended 
intercourse  with  other  countries.  Commerce  grows  with  every 
diminution  in  the  necessity  for  machinery  of  transportation  —  as 
is  shown  in  all  the  countries  which  follow  in  the  lead  of  Colbert, 
and  of  France.  It  declines,  with  every  increase  of  this  necessity, 
as  is  shown  in  Ireland,  Portugal,  Turkey,  the  United  States,  and 
all  others,  which  follow  in  the  direction  indicated  by  England. 

That  commerce  may  grow,  and  that  nations  may  acquire  that 
real  independence  which  exhibits  itself  in  the  power  to  maintain 
direct  intercourse  with  the  world,  there  must  be  steadiness  and 
regularity  of  the  societary  action.  Growing  always  with  the 
growth  of  domestic  commerce,  stability  is  found,  in  all  countries, 
existing  in  the  direct  ratio  of  the  diminution  of  dependence  on 
foreign  trade ;  and  therefore  is  it,  that  France,  Belgium,  Germany, 
and  Russia,  have  passed  through  the  recent  crisis,  almost  un- 
harmed ;  while  in  Britain,  and  among  ourselves — the  two  commu- 
nities whose  policy  looks  to  the  sacrifice  of  domestic  commerce  at  the 
shrine  of  trade — the  societary  movement  would  have  been  almost 
at  an  end,  had  not  the  banks  of  both  suspended  payment. 

The  more  you  reflect  upon  these  facts,  the  more,  Mr.  President, 
it  will,  as  I  think,  be  obvious  to  you,  that  all  our  difficulties  have 
their  origin  in  excess  of  centralization,  and  not  of  localization ; 
and  that  it  is  to  change  in  the  action  of  the  central  government, 
and  not  to  interference  with  the  local  ones,  we  must  look  for 
remedy. 

With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  March  Sth,  1858. 


LETTERS    TO    THE 


LETTER    TWENTY-SIXTH. 

THE  real  and  permanent  interests  of  all  the  members  of  a  com- 
munity, Mr.  President,  are  in  perfect  harmony  with  each  other — 
each  and  every  man  profiting  by  whatever  tends  to  increase  the 
productive  power  of  his  neighbors.  So,  too,  is  it  with  the  com- 
munities themselves  —  each  profiting  by  the  increase  in  the  pro- 
ductive power  of  each  and  all.  That  it  may  increase,  there  must 
be,  in  each,  a  growing  power  of  association  and  combination,  re- 
sulting from  increase  in  the  diversity  of  employments  —  the  con- 
sumer and  the  producer  taking  their  places  by  each  other's  side. 
To  prevent  such  approximation  is  the  object  of  the  "warfare" 
waged  by  the  British  manufacturer,  as  described  in  a  former  letter  ; 
and  hence  it  is,  that  discord  grows  so  steadily  in  all  the  coun- 
tries subject  to  the  British  system  —  Ireland  and  India,  Turkey 
and  Portugal,  Jamaica,  and  these  United  States.  Seeking  evi- 
dence of  the  existence  of  a  perfect  harmony  of  international  inte- 
rests, and  of  the  necessity  for  measures  tending  to  a  reduction  of 
the  power  to  carry  on  that  war,  we  may  look  to  the  statistics 
of  the  cotton  trade  for  the  past  few  years,  to  some  few  figures  in 
regard  to  which,  I  desire  now,  Mr.  President,  to  invite  your 
attention. 

Twenty  years  since,  France  consumed  200,000  bales  of  cotton. 
She  now  requires  400,000.  Twenty  years  since,  Germany  re- 
quired 100,000.  She  now  requires  400,000.  Twenty  years 
since,  Sweden  took  6000  bales.  She  now  takes  60,000.  We 
have,  thus,  an  increase  in  three  highly  protected  countries, 
amounting  to  550,000.  Adding  to  this,  the  additional  demand 
of  Belgium  and  Denmark,  Russia,  Austria,  and  Spain,  we  obtain 
about  700,000,  as  the  quantity  added  to  the  consumption,  in  the 
protected  countries  of  Europe.  Turning  now  homeward,  we  find 
the  addition  in  our  own  consumption,  in  the  six  years  that  followed 
the  passage  of  the  protective  act  of  1842,  to  have  been  about 
300,000  bales;  and  thus  do  we  obtain,  as  the  total  additional 
consumption  of  the  protected  countries,  the  quantity  of  a  million 
of  bales. 

In  four  years,  ending  with  1838,  the  quantity  taken  by  the  mills 
of  Great  Britain  averaged  1,100,000  bales.  In  the  four,  ending 
with  1854,  the  average  was  1,750,000 — the  difference  having  been 
650,000.  In  the  same  period,  however,  there  had  been  an  in- 
crease in  the  export  of  mere  yarn,  to  be  woven  abroad,  amounting 
to  30,000,000  pounds ;  and  an  increase  in  the  imports  from  India, 
to  the  extent  of  nearly  twice  that  quantity,  as  I  have  reason  to 
believe,  although  unable  to  obtain  the  precise  figures.  This  last 
constitutes  no  addition  to  the  supply  of  the  world,  there  being  no 
reason  for  believing  that  more  cotton  is  raised  in  India  now,  than 


PRESIDENT   OF   THE   UNITED   STATES.  149 

was  raised  there  twenty  years  since.  The  excess  import  into 
England,  is  a  consequence  of  decline  of  the  domestic  manufac- 
ture, and  of  the  growing  necessity,  throughout  India,  for  making 
exchanges  among  themselves,  through  the  medium  of  distant 
lands — precisely  as  the  people  of  Illinois  and  Mississippi  are  now 
compelled  to  do.  The  additional  yarn  being  included  in  the  con- 
sumption of  the  countries  to  which  it  goes,  and  the  additional 
India  cotton  giving  no  increase  of  supply,  the  two  quantities  are 
to  be  deducted  from  the  apparent  increase  of  British  consumption. 
That  done,  we  have  little  more  than  400,000  bales,  as  the  growth 
of  consumption  outside  of  the  protected  countries,  against  a  mil- 
lion within  them.  Such  being  the  case,  the  real  interests  of  the 
planter  would  certainly  be  promoted,  by  the  adoption  in  Ireland, 
India,  Brazil,  Turkey,  Portugal,  and  other  unprotected  countries, 
of  the  system  under  which  the  consumption  of  Central  and  North- 
ern Europe  has  so  rapidly  and  wonderfully  increased. 

How  is  it  possible,  Mr.  President,  that  these  various  commu- 
nities could  accomplish  the  work  suggested  ?  All  of  them  are 
poor,  and  so,  it  will  be  said,  they  are  likely  to  remain.  So  must 
they  do,  while  they  shall  continue  the  work  of  destroying  capital, 
as  they  are  now  doing ;  but,  so  they  will  not  do,  whenever  they 
shall  begin  to  establish  that  circulation  of  service  which  consti- 
tutes society,  and  economizes  labor.  Ireland  feeds  daily  more 
than  seven  millions  of  people  —  all  of  them  consumers  of  capi- 
tal, while  but  few  of  them  produce  anything  to  represent  the 
things  consumed.  More  than  three-fourths  of  the  mental  and 
physical  power  of  that  country  goes  to  waste ;  but  that  waste 
would  cease,  so  soon  as  A  and  B  were  enabled  to  exchange  ser- 
vices with  C  and  D  ;  and  they,  each  and  all,  were  enabled  to 
exchange  with  others.  Estimating  the  loss  as  being  equivalent 
to  the  labor  of  only  two  millions  of  men  and  women,  and  the 
value  of  the  things  they  might  produce,  at  only  half  a  dollar  per 
day,  we  obtain  a  daily  amount  of  a  million  of  dollars;  and  an 
annual  one  of  $300,000,000.  The  effect  of  this  labor  in  utilizing 
the  coal,  the  ore,  and  the  thousand  other  things,  now  useless,  by 
which  those  idle  millions  are  surrounded,  would  be,  to  add  almost 
as  much,  yearly,  to  the  value  of  the  land  in  cultivation ;  and 
here  we  have  an  annual  amount,  far  exceeding  the  total  value  of 
the  machinery  for  mining  coal  and  smelting  iron  ore,  and  for 
spinning  and  weaving  cotton,  wool,  flax,  and  silk,  now  in  use  in 
England.  Turning  to  India,  we  see  a  hundred  millions  of  people, 
nine-tenths  of  whose  powers  are  wasted  for  want  of  domestic  com- 
merce. Give  them  that,  and  capital  will  at  once  exist,  to  an 
amount  far  greater  than  that  of  the  machinery  of  Britain  and 
France  combined.  Looking  next  to  Turkey  and  Portugal,  we 
see  millions  of  people  in  a  situation  precisely  similar ;  and  yet, 
they  must  all  be  fed,  clothed,  lodged,  and  kept  in  order  for  daily 
work.  The  daily  loss,  there,  is  greater  than  the  annual  amount 
of  skill  and  labor  given  by  England  to  the  conversion  of  the  cot- 


150  LETTERS   TO   THE 

ton  and  the  wool,  the  iron,  the  copper,  and  the  tin,  they  can 
afford  to  purchase.  Let  employments  be  diversified,  and  that  loss 
will  cease  ;  and  then,  capital  will  be  found  to  exist  in  vast  abun- 
dance. So  is  it  everywhere.  Mexico  and  Peru  would  have  an 
abundant  supply  of  capital,  were  they  enabled  so  to  modify  their 
policy  as  to  produce  that  circulation  which  is  required  for  se- 
curing, that,  each  and  every  man  be  enabled  to  sell  his  own 
powers,  and  to  become  a  competitor  for  the  purchase  of  those  of 
others.  All  force  results  from  motion,  and  it  is  only  because 
there  is  no  motion  in  the  society  of  Ireland,  India,  and  Turkey, 
that  those  communities  continue  poor. 

Looking  now  homewards,  Mr.  President,  we  find  a  waste  of 
capital,  in  the  form  of  physical  and  mental  power,  not  exceeded 
by  any  country  of  the  world,  with  the  slightest  claim  to  be  held 
as  civilized.  Farm  after  farm  is  cleared,  and  State  after  State 
occupied,  to  be  then  in  part  abandoned,  because  of  the  growing 
necessity  for  robbing  the  earth  of  its  soil,  to  be  sold  in  distant 
markets.  Mills  follow  mills,  and  furnaces  follow  furnaces — ruin- 
ing, in  quick  succession,  all  who  undertake  such  works.  Em- 
ployers and  workmen  spend  years  in  acquiring  skill  —  to  be  then 
turned  adrift,  to  seek,  in  the  wilds  of  the  West,  the  food  and 
clothing  that  the  policy  of  the  central  government  denies  to  them 
at  home. 

With  every  step  in  this  direction,  the  tax  of  transportation 
grows  —  the  necessity  for  new  roads  increasing,  as  the  power  to 
make  such  roads  declines.  The  proportion  of  the  population 
engaged  in  the  work  of  transportation,  and  in  political  and  tra- 
ding speculation — the  class  of  middlemen — that  class  which  lives 
at  the  cost  of  the  producers — is,  therefore,  a  continually  increasing 
one.  Hence,  Mr.  President,  it  is,  that  we  so  steadily  decline  in 
both  morals  and  manners — that  being  the  road/rom  civilization, 
and  not  the  one  leading  towards  it. 

Look  where  we  may,  we  witness  a  waste  of  labor,  consequent 
upon  the  absence  of  that  diversification  in  the  demand  for  human 
effort,  which  is  needed  for  giving  us  that  freedom  of  domestic 
commerce,  regarded  by  yourself  as  being  so  essential  to  the  crea- 
tion of  an  extended  intercourse  with  foreign  countries.  Millions 
of  human  engines  are  constantly  burning  the  fuel  required  for  the 
production  of  the  power  to  labor,  and  as  constantly  blowing  off 
the  steam  that  is  produced.  Look  where  we  may,  we  see  mills 
and  furnaces,  mines  and  roads,  scarcely,  even  when  at  all,  em- 
ployed— all  the  power  they  are  prepared  to  furnish,  thus  going  to 
waste.  Why  is  it  wasted  ?  Because,  unable  to  find  a  market  for 
his  grain,  the  farmer  is  forced  to  store  it.  Why  can  he  not  sell 
it  ?  Because  the  miller,  the  weaver,  the  carpenter,  the  miner, 
the  mason,  and  the  laborer,  are  unable  to  sell  the  force  resulting 
from  the  consumption  of  food. 

Look,  I  pray  you,  Mr.  President,  to  the  extraordinary  waste 
of  capital,  consequent  upon  the  necessity  for  using  the  most  perish- 


PRESIDENT   OF   THE    UNITED    STATES.  151 

able  materials  in  our  houses,  ships,  roads,  bridges,  and  other  con- 
structions, of  every  kind.  This,  too,  is  a  growing  waste,  as  is 
proved  by  the  fact,  that  the  rate  of  insurance  against  fire  has 
doubled  in  the  last  few  years.  In  countries  that  are  advancing  in 
civilization,  security  increases,  and  the  rate  declines.  With  us, 
security  steadily  diminishes,  and  the  rate  increases — thus  furnish- 
ing further  evidence  that  our  tendencies  are  from,  and  not  to- 
wards, civilization.  Why  is  it,  that  we  use  so  little  iron  ?  Is 
it  because  of  any  deficiency  of  coal  and  ore?  Certainly  not. 
Why,  then,  do  we  not  profit  by  them  ?  The  country  abounds  in 
laborers,  who  would  gladly  employ  themselves  in  the  development 
of  the  treasures  of  the  earth,  could  they  obtain  food  in  exchange 
for  labor.  Why  is  it  so  ?  Because  the  central  government  leaves 
the  people  entrusted  to  its  care,  exposed  to  a  "warfare"  having 
for  its  object,  the  prevention  of  the  mining  of  coal,  or  the  making 
of  iron,  in  any  country,  except  the  single  one  of  Britain.  Because 
it  holds,  that  while  bound  to  protect  itself,  it  is  under  no  obliga- 
tion to  protect  its  constituents. 

Look  next,  I  pray  you,  Mr.  President,  to  the  taxation  of  our 
farmers,  for  the  maintenance  of  the  7, 000,000  tons  of  shipping, 
that  carries  our  products  to  the  distant  markets,  and  reflect, 
that  the  cost  of  maintaining  this  great  fleet,  is  paid  by  the 
people  who  have  rude  products  to  sell,  and  not  by  those  who 
buy  them.  The  man  who  must  go  to  market,  must  pay  the  cost 
of  going  to  it,  let  it  take  what  form  it  may.  The  corn  and  the 
cotton  pay  for  the  maintenance  of  the  ships — leaving  to  the  cloth 
all  the  profits  resulting  from  their  contributions. 

Look  further,  to  the  fact,  that  the  loss  of  shipping,  in  a  single 
year,  by  age  and  accident,  is  no  less  than  93,000  tons,  as  shown 
in  the  last  Treasury  Report.  At  $40  a  ton,  we  have,  here,  no 
less  than  $37,000,000.  Add  to  this,  for  the  cargoes  of  these 
vessels,  only  a  similar  amount,  and  you  have  $74,000,000  ;  all  of 
which  falls  upon  the  people  who  furnish  the  machinery  of  trans- 
portation— it  being  the  community  whose  products  are  most  bulky, 
that  pays  the  cost  of  going  to,  and  returning  from,  the  market. 

Throughout  the  Union,  Mr.  President,  there  is  a  waste  of  power 
unparalleled  in  the  world.  That  power  is  capital.  At  how  much 
might  it  be  valued,  were  it  fully  applied?  At  more  than  the 
whole  of  our  present  product — the  quantity  wasted  being  greatly 
more  than  that  employed.  Our  present  production  has  been 
estimated  at  $3,500,000,000  a  year  —  being  nearly  $10,000,000 
a  day.  Estimating  the  daily  waste  at  no  more  than  that  sum, 
we  should  have  for  the  weekly  one,  a  sum  equal  to  the  capital 
that  has  been  required  for  the  creation  of  all  the  cotton-mills  of 
England.  Why  do  we  not  economize  this  capital,  and  let  it  ap- 
pear in  the  form  of  mill's  ?  Why  do  we  not  bring  the  spindle  to 
the  plantation  ?  Why  do  we  not  make  a  market  at  the  mines 
and  furnaces,  for  the  produce  of  the  farm  ?  Because  the  central 
government  refuses  to  permit  the  people  to  make  the  effort,  once 


152  LETTERS   TO   THE 

for  all,  to  free  themselves  from  the  tax  of  transportation.  Be- 
cause, in  opposition  to  the  views  so  well  expressed  by  yourself, 
your  immediate  predecessors  have  held,  that  it  was  better  for  each 
man  to  go  daily  to  the  spring  in  search  of  water,  than  that  all  the 
men  should  unite  in  the  effort  to  construct  an  aqueduct,  by  means 
of  which  the  water  should  be  enabled  to  come  daily  to  their  doors. 
That,  Mr.  President,  is  precisely  what  we  are  doing — each  man 
sending  his  little  products  to  the  distant  market,  at  daily  cost  for 
transportation,  when  only  the  slightest  effort  would  be  required 
for  bringing  the  market  to  their  land,  and  thus  annihilating,  at 
once  and  for  ever,  the  tax  of  transportation. 

In  all  countries,  capital  accumulates  in  the  precise  ratio  of  the 
economy  of  human  power.  That  it  may  be  economized,  there 
must  be  differences  in  society,  resulting  from  the  development  of 
the  various  faculties  of  men.  The  commercial  policy  of  France 
tends  in  that  direction,  and  therefore  does  she  grow  rich  ;  while, 
for  want  of  that  policy,  Turkey  and  Portugal,  Ireland  and  India, 
and  our  Union,  decline  from  day  to  day — doing  this  for  the  plain 
and  simple  reason,  that  in  each  and  every  of  them  there  is  an  en- 
forced waste  of  capital,  amounting,  weekly,  to  more  than  the 
annual  value  of  the  foreign  manufactures  they  consume.  Let  them 
be  emancipated  from  the  dominion  of  trade  —  let  them  have  com- 
merce at  home  —  and  they  will  soon  have  more  to  sell,  and  will  be 
enabled  to  buy  far  more  than  they  now  do  —  becoming  larger  cus- 
tomers to  the  producers  of  cotton  and  sugar  on  the  one  hand,  and 
to  the  makers  of  silks  and  ribbons  on  the  other ;  and  adding,  too, 
to  the  market  of  these  latter,  by  increasing  the  demand  for  the 
products  of  the  former. 

The  farmers  of  the  world,  Mr.  President,  are  natural  allies,  as 
against  the  trader  —  he  seeking  to  have  their  products  at  low 
prices,  and  they  desiring  to  sell  at  high  ones.  In  the  natural 
order  of  things,  then,  the  agricultural  nations  should  be  found 
united  in  their  resistance  to  a  warfare  against  themselves,  having 
for  its  object,  the  cheapening  of  their  products.  In  Europe,  they 
are  so  found  —  all  the  advancing  countries  having  adopted  mea- 
sures of  protection.  As  a  consequence,  their  demands  upon  our 
planters  are  steadily  increasing ;  and  yet,  strangely  enough,  our 
planting  interest  is  the  steady  opponent  of  protection,  here  and 
everywhere !  Constantly  profiting,  as  they  do,  by  the  increased 
demands  of  France  and  Germany,  they  appear  before  the  world 
as  advocates  of  the  system,  under  which  the  Irish  and  Portuguese 
demand  for  cotton,  has  almost  disappeared.  Hence  it  is,  that, 
instead  of  placing  ourselves,  as  we  might  do,  in  the  lead  of  the 
world,  we  are  rapidly  declining  towards  that  condition  of  colonial 
dependence,  from  which  we  were  rescued,  by  the  war  of  17  7  6. 
With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  March  IQih,  1858. 


PRESIDENT  OF  THE   UNITED   STATES.  153 


LETTER    TWENTY-SEVENTH. 

THE  first  of  all  the  taxes  to  be  paid  by  land  and  labor  being 
that  of  transportation,  it  follows,  Mr.  President,  that  it  takes  pre- 
cedence of  contributions  required  for  the  maintenance  of  the  State. 
All  that  Iowa  can  claim  of  her  citizens,  is  a  share  of  the  few 
cents  there  received  for  a  bushel  of  corn,  and  not  a  share  of  the 
many  cents  paid  for  it  in  Manchester. 

The  tax  of  transportation  diminishing  with  every  increase  in 
the  power  of  combination,  consequent  upon  increase  in  the  diver- 
sity of  employments,  it  follows,  necessarily,  that  the  power  of 
the  State  grows  with  the  growth  of  the  power  of  combination 
among  its  people.  The  farmer  close  to  New  York,  who  sells  his 
corn  at  a  dollar  a  bushel,  is  more  able  to  contribute  to  the  sup- 
port of  government,  than  his  competitor  of  Iowa,  who  gives  four, 
five,  or  six  bushels,  for  a  similar  quantity  of  money. 

The  greater  the  diversity  of  employments,  the  more  is  the  ten- 
dency towards  development  of  the  various  powers  of  the  earth, 
and  towards  the  creation  of  manufacturing  and  mining  towns  and 
villages  —  each  constituting  a  local  centre  of  attraction,  capable 
of  counteracting  the  centralizing  tendencies  of  the  State  at  large. 

That  these  propositions  are  true,  cannot,  Mr.  President,  be 
questioned.  Being  so,  the  general  laws  deducible  from  them 
would  seem  to  be  as  follows :  The  more  numerous  the  demands 
for  human  faculty,  and  the  greater  their  variety,  the  greater  is 
the  power  of  combination  among  men — the  more  productive  must 
be  their  labor  —  the  greater  must  be  the  tendency  towards  the 
creation  and  extension  of  local  institutions — and  the  greater  must 
be  the  power  of  the  State  of  which  they  are  a  part. 

Such  being  the  law,  it  follows,  necessarily,  that  the  less  the 
variety  in  the  demand  for  human  powers,  the  greater  must  be  the 
tendency  towards  exhaustion  of  the  soil,  and  dispersion  of  its 
people — every  step  in  that  direction  being  accompanied  by  dimi- 
nution of  local  power,  and  growing  weakness  of  the  State. 

That  such  is  the  law,  we  have  proof  in  the  enormous  revenue 
of  England  of  the  present,  as  compared  with  the  England  of  the 
Plantagenets ;  and  in  those  of  France,  and  all  the  countries  that 
follow  in  the  lead  of  Colbert,  as  compared  with  Ireland,  India, 
Portugal,  Turkey,  and  all  other  countries  that  follow  in  the  direc- 
tion now  indicated  by  the  economists  of  England. 

How,  Mr.  President,  is  it  with  ourselves  ?  The  answer  to  this 
question  would  seem  to  be  found  in  the  single  statement,  that  em- 
ployments become  less  diversified  from  year  to  year.  With  each 
successive  year,  for  ten  years  past,  our  people  have  been  more 


154  LETTERS  TO   THE 

and  more  compelled  to  make  their  election  between  the  work  of 
robbing  the  soil,  on  the  one  hand,  and  plundering  their  fellow 
men,  on  the  other  —  the  proportion  borne  by  traders  and  trans- 
porters, speculators  and  peculators,  lawyers  and  politicians,  office- 
hunters  and  office-holders,  and  middlemen  of  all  descriptions, 
to  the  whole  mass  of  society,  having  been  a  constantly  increasing 
one.  Great  as,  in  those  years,  has  been  the  tendency  in  that  direc- 
tion, it  has  increased  tenfold,  in  the  brief  period  in  which  you  have 
occupied  the  presidential  chair  —  mills,  furnaces,  mines,  and  ma- 
chine shops  having,  everywhere,  been  closed,  and  hundreds  of 
thousands  of  people  having  been  reduced  to  choose  between 
crime,  on  the  one  hand,  and  destitution,  if  not  even  death,  on  the 
other. 

Such,  Mr.  President,  being  the  state  of  things  among  the  peo- 
ple, what  should  it  be,  in  the  relation  of  the  people  to  the  State  ? 
If  increasing  diversity  of  employments  among  the  one,  gives 
strength  for  the  maintenance  of  the  other,  should  not  decline  in 
that  diversity  be  attended  with  growing  weakness  in  the  State  ? 
Assuredly  it  should,  and  that  it  really  is  so,  we  shall  obtain  abun- 
dant evidence,  turn  to  what  portion  of  the  Union  we  may. 

Looking  first  to  New  England,  we  witness  an  emigration  of  the 
most  remarkable  kind — each  and  every  stage  thereof  being  accom- 
panied by  consolidation  of  the  land,  diminution  of  cultivation, 
and  decline  of  power  to  maintain  schools,  churches,  roads,  and  go- 
vernment. From  one  quarter,  we  hear  that  it  has  become  "evi- 
dent that  the  number  of  families  in  quite  a  number  of  our  agri- 
cultural towns  is  growing  less.  The  old  homesteads,"  as  we  are 
further  told,  "become  the  property  of  the  adjacent  husbandman, 
or  go  to  ruin  under  the  proprietorship  of  some  far-off  owner." 
From  another,  we  learn,  that  "many  of  the  churches  are  reduced 
to  the  last  extremity,"  and  that,  "but  for  the  missionary  society; 
by  which  not  a  few  of  them  are  supplied,  would  yield  at  once  to 
utter  discouragement."  Such  being  the  general  tendency  through- 
out New  England,  the  "wonder  is  not,  that  so  many  Eastern 
churches  are  drooping,  but  that  they  have  so  long  borne  up 
against  the  constant  and  copious  depletion  of  their  vigor  and 
their  piety. ' ' 

Turning  now  to  New  York,  we  find  a  State  in  which  the  average 
yield  of  wheat,  has  fallen  to  little  more  than  a  dozen  bushels  — 
one,  in  which  the  diminution  of  the  rural  population,  and  the  con- 
solidation of  the  land,  become  more  rapid  with  each  successive 
year.  Taking  next,  the  Western  portion  of  the  State,  one  of  the 
finest  wheat-growing  countries  of  the  world,  so  recently  a  wilder- 
ness, we  find  its  farmers  already  engaged  in  discussing  the  neces- 
sity of  abandoning  the  wheat  culture,  as  the  only  means  of  freeing 
themselves  from  the  ravages  of  insects,  provided  by  the  Creator 
for  the  removal  of  diseased  and  decaying  vegetable  matter.  Com- 
pelled to  the  exhaustion  of  their  soil,  and  unable  to  vary  their 


PRESIDENT   OF  THE   UNITED   STATES.  155 

cultivation,  their  plants  become  weaker  from  year  to  year,  and 
more  and  more  fitted  to  become  the  prey  of  the  fly,  and  other 
enemies.  As  a  consequence  of  this  it  is,  that  emigration  steadily 
increases,  and  that  the  power  to  maintain  the  local  institutions  as 
steadily  declines. 

The  young  Ohio,  now  but  little  more  than  half  a  century  old, 
has  already  become,  and  for  similar  reasons,  the  great  emigrating 
State  of  the  Union  —  the  diminution  in  the  yield  of  her  land, 
having  kept  equal  pace  with  augmentation  of  the  pressure  of 
taxation  for  local  purposes.  Passing  thence,  to  the  yet  younger 
Indiana,  we  find  the  same  great  fact  —  local  institutions  that  had 
been  self-supporting,  having  been  compelled  to  look  abroad  for 
the  means  of  continuing  their  existence. 

Turning  now  South,  we  see,  in  Virginia,  a  .community  occu- 
pying a  land,  that  has  been  blessed  by  nature  to  an  extent  not 
exceeded  in  the  world,  and  yet  her  government  finds  itself  com- 
pelled to  tax  tradesmen  and  tavern-keepers,  attorneys  and  den- 
tists, clocks,  harps,  pianos,  carriages,  slaves,  and  numerous  other 
commodities  and  things,  for  the  purpose  of  obtaining  the  means 
required  for  its  support.  Quite  recently,  it  has  been  proposed 
to  lay  an  export  duty  upon  oysters,  as  a  means  of  maintaining  the 
declining  credit  of  the  State !  Having  torn  out  and  sold  her 
soil,  she  has  little  now  to  sell,  but  slaves  ;  and,  as  a  necessary 
consequence,  the  burthen  of  the  local  institutions  becomes  greater 
from  year  to  year.  How  it  is  with  South  Carolina,  you  have 
seen,  Mr.  President,  in  an  extract  from  a  Report  made  to  the 
Agricultural  Society  of  that  State,  given  in  a  former  letter.* 
Georgia  has  almost  ceased  to  increase  in  population,  although 
her  territory,  properly  cultivated,  would  support  half  the  people 
of  the  Union.  Alabama,  a  State  that,  but  forty  years  since,  was 
almost  entirely  unoccupied,  is  following  rapidly  in  the  train  of 
Carolina  and  Georgia  —  the  yield  of  her  soil  decreasing  —  land 
becoming  consolidated  —  and  the  power  of  extending,  or  even 
maintaining,  churches,  schools,  or  State,  declining  with  each 
successive  year. 

The  policy  of  the  central  government,  Mr.  President,  tends  to 
the  subjection  of  the  farmer,  and  the  planter,  to  the  trader,  and 
to  the  building  up  of  great  cities,  to  be  supported  at  the  cost  of 
those  who  produce  corn  and  cotton,  and  need  to  consume  cloth 
and  iron.  Look,  I  pray  you,  to  the  fact,  that  the  city  govern- 
ment of  New  York  alone,  expends,  this  year,  more  than  $8,000,000. 
Who  are  the  payers  of  these  millions  ?  The  trader  ?  The  specu- 
lator ?  The  property-holder  ?  The  ship-owner  ?  It  is  none  of 
these  —  all  of  them  exercising  the  power  to  tax  the  unfortunate 
producers  who  find  themselves  compelled  to  depend  upon  distant 
markets,  and  to  accept  a  single  yard  of  cloth  in  exchange  for  the 

*  See  note  to  Letter  XXII. 


156  LETTERS   TO   THE 

corn  that  commands,  in  Manchester,  ten  or  a  dozen  yards.  The 
man  who  must  go  to  market,  must  pay  the  cost  of  getting  there, 
let  it  take  what  form  it  may;  and  among  the  items  of  cost,  that  of 
maintaining  the  traders,  brokers,  and  speculators,  of  a  city  like 
New  York,  stands  forth  most  conspicuously.  The  necessity  for 
going  to  a  single  and  distant  market,  increases  with  every  year  — 
every  step  in  that  direction  being  attended  by  an  augmentation 
of  the  power  of  the  trader  and  transporter,  accompanied  by  de- 
cline in  the  powers  of  the  land,  and  in  the  prices  of  its  products. 
These,  Mr.  President,  being  evidences  of  declining  civilization, 
we  need  be  at  little  loss  to  account  for  the  fact,  that  it  has  been 
here  declared,  that  "free  society  has  proved  a  failure,"  and  that 
bondage  is  the  natural  condition  of  the  laboring-man,  be  he  white 
or  black. 

How  is  it,  with  our  central  government  —  the  only  one,  claim- 
ing to  be  regarded  as  civilized,  by  which  it  is  held,  that  the  duties 
of  government  are  limited  to  the  protection  of  itself,  and  the  com- 
pensation of  its  members  and  its  servants  —  leaving  wholly  out  of 
view  the  protection  of  the  people,  for  the  promotion  of  whose  in- 
terests it  was  established  ?  Do  its  demands  upon  the  people 
diminish  with  the  decline  in  the  powers  of  the  laud,  and  in  the 
prices  of  its  products  ?  Does  the  farmer  who  takes  12  bushels 
where  his  predecessor  had  obtained  24,  pay  less  to  the  support 
of  the  Federal  government  ?  Docs  the  flour  which  now  sells  for 
$4,  contribute  less  to  the  support  of  Federal  officers,  than  that 
which,  forty  years  since,  was  sold  at  $10  ?  Does  the  cotton  which 
sells  at  8  cents,  contribute  less  for  the  support  of  ships  of  war, 
than  that  which  sold,  in  1816,  at  25  ?  Is  the  tobacco  which  com- 
mands $50  or  $60,  less  taxed  for  the  payment  of  senators  and 
representatives,  than  that  which  sold,  forty  years  since,  for  $100 
or  $120  ?  —  Let  us,  Mr.  President,  inquire. 

In  the  half  century  which  followed  the  close  of  the  war  of  1783, 
the  highest  expenditure  of  the  Federal  government,  in  time  of 
peace,  was  $14,000,000  ;  and  even  that  amount  had  been  reached 
only  in  the  first  term  of  General  Jackson's  administration  — 
the  average  expenditure  of  his  immediate  predecessor,  Mr.  Adams, 
having  been  only  $12,500,000,  while  that  of  Mr.  Monroe's  two 
terms,  had  been  $13,000,000. 

The  average  contribution,  in  the  times  of  Messrs.  Adams  and 
Monroe,  may  be  taken  at  about  $1.70  per  head.  In  General 
Jackson's  first  term,  it  was  less  —  the  population  of  1830  having 
been  nearly  13,000,000,  and  the  amount  of  contribution  only 
$14,000,000  ;  or  little  more  than  a  dollar  per  head.  The  reduc- 
tion thus  exhibited,  was  evidence  of  growing  strength  of  the  local 
powers  —  proving  advance  in  civilization. 

Five-and-twenty  years  have  since  elapsed,  during  the  whole  of 
which  time,  as  you,  Mr.  President,  have  seen,  the  central  govern- 
ment has  been  engaged  in  almost  ceaseless  efforts  to  extend  its 


PRESIDENT   OF   THE   UNITED    STATES.  157 

powers,  at  the  cost  of  the  local  authorities.  Daring  nearly  all 
that  period,  its  policy  has  tended  to  diminish  the  number  of  em- 
ployments open  to  our  people  —  to  lessen  the  power  of  combina- 
tion for  any  useful  purpose  —  to  increase  the  cost  of  transporta- 
tion —  to  make  the  farmer  and  planter  more  dependent  on  the 
distant  market  —  and  thus  to  re-introduce  the  colonial  system,  so 
well  described  by  Mr.  Gee,  from  which  we  were  emancipated  by  the 
war  of  1776.  The  result  is  seen  in  the  facts,  that,  while  the  popu- 
lation has  increased  but  about  130  per  cent.,  the  expenditure  has 
quintupled  in  amount,  and  more  than  doubled  in  its  ratio  to  the 
number  of  persons  by  whom  the  contributions  were  paid. 

Why  is  this  so  ?  Because,  in  opposition  to  the  practice  of  the 
enlightened  and  civilized  countries  of  the  world,  it  is  held  by  our 
central  government,  that  the  larger  the  space  occupied  by  any 
given  number  of  people,  and  the  less,  consequently,  the  power  of 
association  and  combination,  the  greater  must  be  the  power  of 
the  state.  Always  on  the  watch  for  the  acquisition  of  land, 
however  poor,  we  have  gone  on,  adding  Florida  to  Lousiana, 
Texas  to  Florida,  California  to  Texas,  and  New  Mexico  to  Cali- 
fornia ;  and  now  hold  ourselves  ready,  at  almost  any  cost  of 
honor,  or  of  treasure,  to  become  proprietors  of  Cuba,  or  Sonora. 
With  every  step  in  that  direction,  there  arises  a  necessity  for  in- 
crease of  fleets  and  armies,  and  increase  in  the  number  of  public 
officers  —  with  corresponding  decrease  iu  the  power  of  the  people 
to  provide  the  means  required  for  their  support.  In  all  advancing 
countries  of  the  world,  the  proportion  of  the  proceeds  of  labor 
required  for  the  purposes  of  government,  is  a  decreasing  one.  In 
all  declining  countries,  it  is  an  increasing  one.  With  us,  it  steadily 
increases  —  the  amount  demanded,  per  head,  being  now  twice  as 
great  as  it  was,  when  the  selling  prices  of  our  raw  products  were 
more  than  twice  as  high  as  they  are  now. 

That  the  progress  of  men,  whether  towards  centralization  or 
localization,  slavery  or  freedom,  barbarism  or  civilization,  is  one 
of  constant  acceleration,  is  a  truth,  the  evidence  of  which  is  found 
in  every  page  of  history ;  but  nowhere,  Mr.  President,  can  stronger 
proof  be  found,  than  in  the  records  of  our  Treasury.  Fifteen 
years  since,  under  the  administration  of  Mr.  Tyler,  the  expenditure 
of  the  Federal  government  was  $23,500,000.  It  is  now  $70,000,000, 
and  there  is  every  reason  to  believe,  that  before  the  end  of  your 
administration  it  will  reach  $100,000,000 — the  necessity  for  ships 
of  war,  and  soldiers,  increasing  with  the  decline  in  value  of  all 
the  commodities  we  have  to  sell.  Five  years  since,  the  expendi- 
tures of  New  York  city  were  under  $3,000,000.  They  are  now 
$8,500,000  ;  and  there  is  every  reason  to  believe,  that  before  the 
close  of  another  decade,  they  will  have  largely  grown— the  power 
ty)  tax  the  farmers  and  planters  of  the  country,  growing  with  every 
step  in  the  progress  towards  reduction  of  the  population  to  de- 


158  LETTERS   TO    THE 

pendence  on  the  sale  of  the  soil,  in  the  form  of  wheat  and  cotton, 
for  the  means  of  present  support. 

For  half  a  century,  during  which  the  Federal  government  was 
administered  by  Washington  and  his  successors,  down  to  Jack- 
son, the  general  tendency  of  its  action  was  towards  carrying  into 
practical  effect  the  Declaration  of  our  Independence.  During 
nearly  all  that  time,  there  was  a  general  tendency  towards  increase 
in  the  diversity  of  employments,  with  constant  increase  in  the 
power  of  association,  in  the  strength  of  local  action,  and  in  the 
steadiness  of  the  currency  —  no  general  suspension,  in  time  of 
peace,  having  occurred  in  all  that  time.  In  the  period  that  has 
since  elapsed,  the  policy  of  the  revolution  has  been  abandoned, 
with  constant  increase  in  the  dependence  of  the  planter  and  farmer 
upon  the  distant  trader.  The  power  of  local  action,  therefore, 
steadily  declines,  with  constant  diminution  in  the  respect  of  the 
central  government  for  local  rights,  and  growing  instability  of  the 
currency — the  suspensions  of  payment,  in  that  brief  period,  having 
been  no  less  than  three  in  number. 

In  the  half  century  from  Washington  to  Jackson  —  the  policy 
of  the  country  having  been  that  of  peace,  and  of  the  extension  of 
that  domestic  commerce  you  have  so  well  described — the  Federal 
government  was  economically  administered,  and  the  power  to  con- 
tribute to  its  support  was  a  steadily  augmenting  one.  Since  then 
—  the  policy  having  become  that  of  free  trade,  annexation,  and 
war  —  the  expenses  of  the  central  government  have  greatly  in- 
creased, while  the  power  to  contribute  to  its  support,  or  to  that 
of  local  institutions,  has  tended  to  diminish.  In  the  first,  Mr. 
President,  all  the  phenomena  we  meet  are  those  of  an  advancing 
civilization.  In  the  other,  they  are  those  of  a  declining  one.  — 
How  far  the  one,  or  the  other,  has  tended  to  the  production  of 
strength  in  the  State,  I  propose  to  examine  in  another  letter  — 
remaining  meanwhile, 

With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 
Philadelphia,  March  I2th,  1858. 


PRESIDENT   OF  THE    UNITED   STATES.  159 


LETTER    TWENTY-EIGHTH. 

STEADINESS  and  regularity  of  movement,  in  machinery  of  any 
kind,  is  necessary  to  the  maintenance  of  motion,  and  the  develop- 
ment of  power.  A  steam-engine  subjected  to  sudden  and  repeated 
shocks,  could  have  but  a  brief  existence.  So,  too,  Mr.  President, 
is  it  with  individuals  and  societies  —  regularity  of  action  being 
indispensable  to  the  development  of  their  powers,  to  durability, 
and  to  increase  of  their  influence  on  the  movements  of  the  world 
at  large.  How  far  such  regularity  has  been  attained  among  our- 
selves, and  how  far  our  various  systems  of  policy  have  tended  to 
augment,  or  lessen,  the  ability  to  control  our  own  movements,  and 
to  influence  the  action  of  the  world,  it  is  proposed  now  to  show. 

Peace  was  restored  to  the  world  in  1815.  We  had  passed, 
almost  unharmed,  through  a  war  with  Great  Britain,  and  had 
come  out  of  it  rich  and  strong.  The  tariff  being  a  highly  protec- 
tive one,  the  customs-revenue  was  large  —  exceeding  $36,000,000. 
One  year  later,  the  system  was  changed  —  all  the  changes  being 
in  the  direction  of  present,  or  ultimate,  abandonment  of  the  idea 
of  protecting  the  farmer  in  his  efforts  to  bring  the  consumer  to 
his  side,  and  thus  relieve  himself  from  the  wasting  tax  of  trans- 
portation. Factories  and  furnaces  being,  therefore,  closed, 
mechanics  and  laborers  were  compelled  to  seek  the  West,  and 
sales  of  public  land  rapidly  increased.  Large  receipts  from  both 
land  and  customs  gave  us,  of  course,  a  prosperous  treasury  —  the 
total  receipts  of  1819  having  been  $24,000,000;  collected,  too, 
at  a  time  when,  as  now,  the  number  of  unemployed  workmen  in 
each  of  our  principal  cities,  counted  by  tens  of  thousands.  — 
Suddenly,  however,  the  scene  changed — poverty  of  the  people 
producing  inability  to  continue  the  payment  of  contributions  to  the 
public  treasury.  The  total  revenue  fell,  in  1821,  to  $14,000,000, 
or  little  more  than  a  third  of  what  it  had  been,  but  five  years  pre- 
viously ;  and  the  Treasury,  but  recently  so  rich,  was  reduced  to  the 
necessity  of  resorting  to  loans ;  and  that,  too,  in  a  time  of  pro- 
found peace  !  —  Such,  Mr.  President,  was  the  result,  so  far  as  the 
Treasury  was  concerned,  of  the  first  free-trade  experiment. 

The  year  1828  having  given  us  a  really  protective  tariff,  the 
following  were  the  receipts  of  the  Treasury,  in  the  brief  period  of 
its  existence :  — 

Customs.  Land.  Total. 

1829  $22,681,000  , $1,517,000  $21,198,000 

1830  21,922,000  2,329,000  24,251,000 

1831  24,224,000  3,210,000  27,434,000 

1832  28,465,000  2,623,000  31,088,000 

1833  29,033,000  8,967,000' 83,000,000 


160  LETTERS   TO   THE 

Here,  Mr.  President,  we  have  a  steadiness,  and  regularity  of 
movement,  worthy  of  all  admiration  —  each  successive  year  gain- 
ing: slightly  upon  its  predecessor,  and  enabling  the  Treasury  to 
command  the  respect  and  confidence  of  the  world  by  the  gradual 
discharge  of  debts  contracted  in  time  of  war,  and  in  the  dis- 
astrous free-trade  period,  which  had  so  closely  followed  the  return 
of  peace. 

The  Compromise  Act  of  1833  repudiated  the  idea  of  protec- 
tion—  the  point  provided  to  be  reached  by  it,  in  1842,  having 
l>een  that  of  a  strictly  revenue  tariff,  with  a  rate  of  duty  limited  to 
20  per  cent.  As  before,  land  sales  became  large,  and  the  total 
revenue  of  1836  exceeded  $48,000,000.  As  before,  however,  the 
apparent  prosperity  was  followed  by  real  adversity  —  the  total 
receipts  of  the  following  years  having  been  as  follows  :  — 

1837  $18,000,000  1839  $30,000,000 

1838  19,000,000  1840  16,000,000 

The  instability  and  irregularity  exhibited  in  the  period  from 
1817  to  1822,  are  here,  Mr.  President,  reproduced  —  the  revenue 
mounting  to  48,  and  then  falling  to  18  millions  —  then,  again, 
going  up  to  30,  to  fall  to  16;  and  all  this,  too,  in  the  short  period 
of  five  years  1  Need  we  be  surprised  at  seeing  that,  under  such  a 
course  of  action,  the  machine  was  shattered  ?  Is  it  wonderful, 
that  the  Treasury  so  entirely  lost  the  confidence  of  those  who  had 
money  to  lend,  as  to  have  failed  in  all  its  efforts  to  negotiate  a 
loan,  either  abroad  or  at  home,  and  to  have  been  compelled  to 
resort  to  the  use  of  irredeemable  paper,  as  affording  the  only 
means  at  its  command,  for  maintaining  the  government  in  exist- 
ence ?  To  all  intents  and  purposes,  it  was  bankrupt — such  hav- 
ing been  the  result  of  the  second  free-trade  experiment. 

The  bankruptcy  of  the  Treasury  having  produced  another  change 
of  policy,  and  protection  having  been  re-adopted,  we  find  a  resto- 
ration of  order  and  regularity  in  the  financial  movement,  as  is 
shown  in  the  following  figures  :  — 

Customs.  Land.  Total. 

1843-4  $26,183,000  $2,059,000  $28,242,000 

1844-5  27,528,000  2,077,900 /  29,605,000 

1845-6  26,712,000  2,699,090  29,406,000 

1846-7  23,747,000  3,328,000  27,075,000 

The  ^policy  being  once  more  changed,  and  the  free -trade 
policy  re-adopted,  we  find  a  repetition  of  the  irregularity  ob- 
served in  both  of  the  former  free-trade  periods — the  total  revenue 
having  varied  between  30  and  72  millions,  and  having  fallen  to  a 
point  so  low,  as  to  compel  the  government,  one  year  since  so  rich, 
to  solicit  purchasers  for  the  irredeemable  paper,  to  the  use  of 
which  it  has  now  been  driven.  In  the  absence  of  demand  for  its 
commodity,  it  has  been  compelled  to  forfeit  its  engagements  for 
the  payment  of  money — thus  committing  what,  in  the  case  of  iudi- 


PRESIDENT   OF  THE   UNITED   STATES.  161 

viduals,  would  be  held  to  be  acts  of  bankruptcy.  Such  is  the 
point,  Mr.  President,  at  which  we  have  now  arrived,  in  the  third 
experiment  of  a  policy  based  upon  the  idea  that  governments  are 
instituted  for  the  purpose  of  protecting  themselves,  and  not  the 
people  for  whose  use  they  have  been  created. 

What,  Mr.  President,  are  the  prospects  of  the  Treasury  for  the 
remaining  years  of  this  experiment  ?  That  we  may  be  enabled  to 
answer  this  question,  we  must  first  inquire  into  the  prospects  of 
the  farmers  and  planters  —  the  power  to  contribute  to  the  public 
revenue,  being  wholly  dependent  upon  the  prices  obtainable  for 
the  masses  of  raw  produce,  that  the  policy  of  the  central  govern- 
ment compels  us  to  throw  upon  foreign  markets. 

To  enable  us  to  predict  the  future,  it  is  required,  that  we  study 
the  past.  Doing  this,  we  find,  that  each  successive  crisis  has 
established  a  lower  standard  of  prices  for  all  our  products  —  flour 
having  declined  steadily,  until  from  $14,  in  1816,  it  had,  at  the 
opening  of  the  Crimean  war,  reached  the  point  of  $4.24;  and 
cotton  having  declined  from  25  cents,  in  1816,  to  little  more  than 
6,  in  the  period  that  followed  the  crash  of  1842.  As  regards  the 
first,  we  have  already  evidence  of  the  existence  of  a  state  of  things 
nearly  correspondent  with  that  of  1852;  and  yet,  the  hundreds 
of  thousands  of  farms  that  have  recently  been  created,  throughout 
the  West,  have  scarcely  begun  to  supply  the  market.  Let  them 
begin,  and  let  the  seasons  be  propitious,  and  the  prices  of  their 
products  are  likely  to  find  a  point  lower  than  has  ever  yet  been 
touched.  As  regards  the  second,  we  have,  already,  the  following 
facts  :  first,  the  average  export-price  from  1852  to  1856,  was  only 
9  cents — having  been  lower  than  that  of  any  free-trade  period  we 
ever  yet  have  known  ;  second,  the  present  price,  with  a  crop  no 
larger  than  that  of  1849,  is  nearly  as  low  as  that  average ;  and, 
third,  the  power  to  produce  cotton,  with  fair  seasons,  is  now  fully 
equal  to  a  crop  of  4,000,000  bales;  or  more,  by  1,200,000,  than 
the  one  that  is  now  in  market.  Let  that  power  be  exercised,  as 
we  see  it  to  have  been,  in  the  years  that  followed  the  last  great 
crash,  and  we  shall  probably  obtain  a  further  confirmation  of  the 
general  principle,  that  each  successive  financial  crisis,  conse- 
quent upon  the  adoption  of  the  policy  recommended  by  Brit- 
ish economists  and  manufacturers,  establishes  an  average  price, 
lower  than  that  which  had  preceded  it.  That  proving  to  be 
the  case,  as  now  appears  very  probable,  it  would  seem  quite 
clear,  that  our  power  to  pay  for  foreign  commodities,  with  the 
proceeds  of  either  food  or  cotton,  must  be  very  small  indeed. 
As  regards  the  existence  of  any  such  power,  resulting  from  the 
exports  of  manufactures,  it  is  needed  only  that  we  remark  the 
facts,  that  most  of  our  mills  are  closed  —  that  the  proprietors  are 
ruined  —  and  that,  there  is  little  probability  of  their  soon  being 
opened.  Gold  —  travelling,  as  it  always  does,  in  company  with 
other  raw  materials— we  shall,  of  course,  export ;  provided  we  can 
11 


162  LETTERS   TO   THE 

find  the  means  to  purchase  it  from  Californian  owners.  Against 
that,  however,  there  is  a  demand,  for  the  payment  of  interest  on 
debts  contracted  in  the  two  free-trade  periods,  amounting  to  little 
less  than  $30,000,000  —  constituting  the  first  mortgage  on  our 
exports. 

Our  credit  having  disappeared,  we  can  obtain  no  more  goods 
than  we  can  pay  for,  and  that  is  little  likely  to  equal  $200,000,000, 
even  if  it  exceed  the  $180,000,000  of  1850,  when  the  customs 
revenue  was  $46,000,000.  Since  then,  however,  all  duties  having 
been  reduced,  while  the  free  list  has  been  much  enlarged,  the  same 
amount  of  imports  would,  now,  yield  little  more  than  $28,000,000.* 
Add  to  this  a  land  revenue  of  $2,000,000,  and  we  obtain  a  total 
of  $30,000,000,  as  the  probable  receipts  of  a  government,  whoso 
expenditures  have  already  reached  $70,000,000;  and  whose  ten- 
dencies in  the  direction  of  increased  expenditure  are  so  very 
great,  as  to  warrant  the  assumption,  that  they  will  speedily  reach 
$100,000,000. 

These  estimates  of  the  amount  of  imports,  and  of  revenue,  differ 
widely,  Mr.  President,  from  those  of  the  Secretary  of  the  Treasury, 
who  tells  us,  that  "looking  to  our  probable  exports,  the  great 
resources  of  our  country,  its  unexampled  prosperity  in  many 
branches  of  industry,  its  capacity  to  recover  from  temporary  pres- 
sure in  its  trade  and  business,  the  opinion  is  expressed,  with  some 
confidence,  that  the  reduction  from  this  cause  will  not  exceed 
twenty-five  per  centum;"  and,  that  the  customs-revenue  upon 
which  we  may  securely  calculate,  wUl  be  $69,500,000. 

He  who  would  predict  the  future,  should  be  able  to  show  that 
he  had  been  able  to  anticipate  the  past.  This,  the  honorable 
Secretary  does  not  undertake  to  do.  On  the  contrary,  he  admits, 
that  the  crisis  had  been  "unforeseen;"  and  all  his  acts,  as  legis- 
lator, and  as  executive  officer,  from  the  opening  of  the  session  of 
1856-7,  prove  that  he  did  not,  in  the  slightest  degree,  anticipate 
the  recent  changes.  Had  he  done  so,  he  would,  certainly,  have 
opposed  the  passage  of  the  tariff  act  of  1857.  Had  he  done  so, 
he  would  not,  so  recently  as  September  last,  have  purchased  at  a 
large  advance,  certificates  of  public  debt,  the  payment  for  which 
so  completely  exhausted  the  funds  at  his  command,  as  to  render 
it  necessary  to  withdraw  from  the  Mint,  all  the  funds  appropri- 
ated to  its  use.  Neither  would  he  have  had  to  call  upou  Con- 
gress to  give  its  instant  attention  to  the  work  of  authorizing  an 
issue  of  irredeemable  paper,  as  the  only  means  of  keeping  the 
government  afloat.  All  the  facts  tending,  thus,  to  prove,  that 
the  Secretary  could  not,  in  the  spring  and  summer  of  1857,  predict 

*  The  Secretary  of  the  Treasury  estimates  the  reduction  of  rates,  effected 
by  the  recent  tariff  law,  at  25  per  cent.  Adding  to  this  the  quantity  of 
goods  now  freed  from  the  payment  of  any  duty  whatsoever,  we  shall  obtain 
a  reduction  of,  more  than  a  third. 


PRESIDENT   OF   THE   UNITED    STATES.  163 

the  occurrences  of  the  the  autumn  and  winter  that  were  to  fol- 
low, I  beg,  Mr.  President,  to  ask  —  desiring,  at  the  same  time, 
to  disclaim  the  slightest  feeling  of  disrespect  for  your  Cabinet 
Minister  —  what  reason  have  we  for  believing,  that  the  predictions 
of  December,  '57,  are  to  be  realized  In  '58,  '59,  or  '60  ?  There 
is,  as  it  appears  to  me,  none  whatever.  They  cannot  be  realized. 
The  crisis  of  '57  ought  not  to  have  been  "unforeseen" — its  ap- 
proach having  been  heralded  by  the  same  phenomena,  that  had 
been  observed  in  1836.  It  was  not  "unforeseen"  by  those  who 
had  taken  the  trouble  to  study  these  phenomena,  and  to  satisfy 
themselves,  that  like  causes  always  produce  like  effects.  Not  only 
was  it  foreseen,  but  its  arrival  was  publicly  predicted ;  and  in  a 
manner,  too,  that  should  have  induced  such  a  study  of  the  facts, 
on  the  part  of  a  finance  minister,  as  would  have  resulted  in  satis- 
fying himself  that  the  prediction  could  not  fail,  and  that,  too, 
speedily,  to  form  a  chapter  in  our  financial  history. 

There  being,  at  present,  no  reason  for  believing  that  our  power 
to  pay  for  foreign  merchandize  will  be  greater  than  it  was  some 
years  since,  and  our  credit  having  wholly  disappeared,  there  is  no 
warrant  for  supposing  that  the  revenue,  for  the  next  three  years, 
can  exceed  $100,000,000 ;  but,  there  is  abundant  cause  for  the 
belief,  that  the  expenditures  of  those  years  will  exceed  $250,000,000. 
Under  such  circumstances,  there  would  seem  little  reason  for 
doubting  that  the  scenes  of  1842  —  exhibiting  a  total  failure  of 
confidence  in  the  ability  of  the  Treasury  to  meet  its  engagements, 
accompanied  by  an  almost  exclusive  dependence  upon  the  use  of 
irredeemable  government  paper  —  are  likely  soon  to  be  repeated. 
How  long,  Mr.  President,  can  such  a  system  be  maintained  ? 
How  long  can  the  government  continue  to  expend  eighty  millions, 
while  collecting  only  thirty  ?  Is  it  not  clear,  that  the  road  we 
are  now  travelling  must  end  in  bankruptcy  the  most  complete  ? 
Will  not  the  conviction  that  such  must  inevitably  be  the  case, 
force  itself  upon  the  money-lenders  of  Europe,  as  well  as  upon 
our  own  ? 

We  are,  however,  assured  by  you,  that,  the  national  credit 
being  high,  loans  can  be  effected  on  "advantageous  terms."  To 
me,  the  reverse  of  this  would  seem  to  be  the  case — the  rate  of 
interest  paid  by  our  Treasury  being  higher  than  that  paid  by  any 
other  community,  claiming  to  be  in  possession  of  a  regularly  or- 
ganized and  stable  government.  That  rate  is  the  true  index  to 
the  confidence  existing — the  man  of  sober,  industrious,  and  regu- 
lar habits,  always  obtaining  the  use  of  money  at  rates  far  lower 
than  those  paid  by  gamblers  and  speculators,  whose  treasuriea  at 
one  moment  are  overflowing,  while  at  the  next,  they  find  them- 
selves in  the  usurer's  hands.  Judging  from  the  fact,  that  the  tri- 
vial amount  of  money  which  constitutes  our  present  debt,  was 
obtained  only  on  the  condition  of  paying  interest  at  the  rate  of 
six  per  cent.,  our  credit  cannot  be  regarded  as  being  very  good. 


164  LETTERS   TO   THE 

Should  it  be  so,  in  face  of  the  fact,  that  we  are  now  again,  and 
in  a  time  of  profound  peace,  compelled  to  resort  to  loans  ? 

We  pay  higher  interest  than  any  community  in  the  world,  claiming 
to  be  held  as  civilized ;  and  this  we  do,  in  common  with  all  the 
countries  that  follow  in  the  direction  indicated  by  England  —  ex- 
porting rude  products,  and  taking  pay  therefor,  in  trivial  quanti- 
ties of  the  same,  returned  in  the  form  of  finished  commodities. 
Contrast,  I  pray  you,  Mr.  President,  our  financial  movements 
with  those  of  France,  and  of  all  the  countries  that  have  followed 
her,  in  adopting  the  policy  indicated  by  Colbert.  Less  than  six- 
teen years  since,  the  representatives  of  our  Treasury  were  seen, 
and  that,  too,  in  a  time  of  profound  peace,  knocking  at  the  doors 
of  all  the  bankers  of  Europe — seeking,  in  vain,  to  borrow  a  single 
dollar.  Now,  again,  in  time  of  peace,  we  find  ourselves  com- 
pelled to  create  a  debt,  the  amount  of  which  is  likely,  before  the 
close  of  your  administration,  to  exceed  a  hundred  millions ;  pro- 
vided, always,  that  it  should  prove  possible  to  borrow  that 
amount.  France  and  Russia,  on  the  contrary,  have  just  passed 
through  a  war  that  has  required  enormous  sacrifices  of  both  men 
and  money ;  and  yet,  neither  the  one,  nor  the  other,  has  had 
occasion  to  go  beyond  its  own  territory  to  obtain  the  supplies 
it  needed.  Shut  out,  by  order  of  the  Allied  Powers,  from  all 
the  principal  money-marts  of  Europe,  Russia  maintained  her 
credit  so  perfectly,  that  her  five  per  cent,  stocks  never,  even  for  a 
single  moment,  fell  below  the  par. 

How  would  it  be  with  us,  Mr.  President,  in  case  of  war, 
cut  off,  as  we  should  be,  from  all  our  accustomed  sources 
for  revenue ;  with  our  ports  blockaded,  and  our  customs  officers 
unemployed  ;  with  no  demand  for  the  rude  products  of  the  soil, 
and  no  demand  for  land  ;  with  a  frontier  accessible  to  the  enemy, 
almost  twice  as  great  as  it  was,  before  the  government  entered 
upon  its  career  of  centralization,  now  five-and-twenty  years  since  ? 
Could  we  maintain  our  stocks  at  par  ?  Certainly  not !  Abun- 
dant evidence  would  then  be  furnished  of  the  accuracy  of  Johnson, 
when  he  declared  that  "extended  empire,  like  extended  gold,  ex- 
changed solid  strength  for  feeble  splendor."  Never,  at  any 
period  of  our  national  existence,  has  the  central  government  been 
so  entirely  incapable,  as  now,  of  guaranteeing  to  the  people  of  the 
various  States,  of  the  Atlantic  and  the  Pacific,  the  secure  enjoy- 
ment of  the  rights  of  person  and  property ;  and  yet,  the  expen- 
ditures of  that  government  are  five  times  greater  than  they  were, 
when  it  first  undertook  to  supersede  the  local  authorities  in  the 
management  of  the  currency. 

France,  Germany,  Sweden,  and  Russia,  and  all  other  countries 
that  have  adopted  the  protective  policy,  grow  daily  stronger, 
while  we  grow  daily  weaker.  Why  is  it  so  ?  Because,  Mr. 
President,  they  appreciate  the  facts,  that  the  first  of  all  taxes  is 
that  paid  to  the  trader  and  the  transporter ;  that  those  taxes 


PRESIDENT   OF  THE   UNITED   STATES.  165 

take,  therefore,  precedence  of  the  demands  of  government ;  and 
that  the  power  of  the  latter  to  obtain  revenue  grows  as  the  tax 
of  transportation  declines,  and  declines  as  that  tax  grows.  Oar 
government,  on  the  contrary,  closes  its  eyes  to  the  existence  of 
those  facts. 

Consequent  upon  this,  it  is,  that  those  governments  seek  to 
promote  the  power  of  combination,  while  ours  is  incessantly  la- 
boring to  destroy  it ;  that  the  one  seeks  to  give  value  to  land,  by 
facilitating  the  transfer  of  its  products,  while  the  other  rejoices 
in  the  abandonment  of  land,  and  the  emigration  of  its  people ; 
that  the  one  seeks  to  create  demand  for  all  the  powers  of  man, 
while  the  other  limits  the  demand  to  that  brute  faculty  required 
for  the  rudest  cultivation  on  the  one  hand,  and  trade  on  the 
other;  that  the  one  would  create  a  rich  agriculture,  while  the 
other  limits  the  business  of  its  farmers  and  planters  to  the  work 
of  tearing  out  and  selling  the  soil,  and  thus  robbing  the  great 
treasury  of  nature ;  and,  that  the  one  seeks  to  supersede  the  trader 
and  transporter  in  the  government  of  its  people,  while  the  other 
labors  to  enable  the  trader  and  transporter  to  supersede  itself. 

The  strength  of  all  communities,  Mr.  President,  increases  in 
the  ratio  of  the  approximation  of  the  prices  of  rude  produce  and 
finished  products,  In  France,  Germany,  Russia,  and  throughout 
Northern  and  Central  Europe,  that  approximation  becomes,  from 
year  to  year,  more  close ;  and  therefore  is  it,  that  serfdom  is  gra- 
dually disappearing,  and  that  those  communities  grow  in  strength, 
wealth  and  power.  In  Turkey,  Portugal,  India,  and  Mexico, 
those  prices  are  steadily  receding,  and  hence  it  is,  that  they  all 
decline  in  wealth  and  strength — that  so  little  confidence  is  felt  in 
their  future — that  men  become  less  free,  from  year  to  year  —  and 
that  they  find  it  necessary  to  pay  so  large  an  interest,  when  they 
need  to  borrow  money.  So,  too,  is  it  with  ourselves,  and  hence 
it  is,  that  our  Treasury  pays  always  so  high  a  rate  of  interest ; 
and,  that  among  those  by  whom  it  has  been  directed,  the  belief  in 
the  necessity  of  man's  enslavement  has  been  a  constantly  growing 
one.  Russia  emancipates  her  serfs,  at  the  moment  when  we  are 
agitating  the  re-opening  of  the  African  slave  trade  ! 

The  more  the  subject  is  studied,  the  more,  as  I  think,  must  it 
become  apparent  to  you,  that  what  we  need  is,  not  a  reduction 
of  the  local  powers,  but  such  a  reformation  of  the  action  of  the 
central  power,  as  shall  make  it  harmonize  with  the  ideas  of  your 
most  distinguished  predecessors. 
With  great  respect, 

Your  obed't  servant, 

HKNBT  C.  CARKT. 

Philadelphia,  March  Ibth,  1858. 


166  LETTERS   TO   THE 

LETTER    TWENTY-NINTH. 

(CONCLUSION.) 

OUR  public  warehouses,  Mr.  President,  are  filled  with  foreign 
merchandise,  always  ready  to  supply  the  material  of  auction  sales. 
Our  auctioneers  are  constantly  at  work,  supplying  the  wholesale 
and  retail  dealers,  at- prices  fixed  by  themselves.  Our  shops  are 
gorged  so  thoroughly,  with  foreign  food  and  labor  in  every  form, 
from  the  coarsest  woollens  to  the  finest  silks,  as  to  leave  no  place 
for  the  domestic  food  and  labor  that  seek  a  market.  Such  is  the 
mode  of  "warfare,"  by  means  of  which  "the  most  wealthy  capi- 
talists" of  Britain  "are  enabled  to  overwhelm  all  foreign  compe- 
tition in  times  of  great  depression,  and  thus  to  clear  the  way  for 
the  whole  trade  to  step  in,  when  prices  revive,  and  to  carry  on 
a  great  business,  before  foreign  capital  can  again  accumulate  to 
such  an  extent,  as  to  be  able  to  establish  a  competition  in  prices 
with  any  chance  of  success."  Such,  Mr.  President,  is  the  sort 
of  warfare,  by  means  of  which  Ireland  and  India  have  been  ruined, 
without  the  necessity  for  firing  a  gun,  or  drawing  a  sword.  Such 
is  the  warfare  against  which  your  fellow-citizens,  for  ten  years 
past,  have  sought,  but  vainly  sought,  to  be  protected  —  the  only 
answer  to  their  petitions  having  been,  that  the  duties  of  the  govern- 
ment were  limited  to  the  task  of  protecting  itself,  leaving  the  peo- 
ple to  protect  themselves  as  they  could. 

As  a  consequence  of  this  it  is  :  that  after  a  growth  of  pauper- 
ism, steadily  continued  during  the  last  ten  years,  we  find  it  sud- 
denly so  much  expanded,  that  hundreds  of  thousands  of  our  peo- 
ple are  wholly  unable  to  sell  their  labor,  or  to  purchase  food  and 
clothing : 

That  factories,  mills,  mines,  and  furnaces,  the  cost  of  which  has 
counted  by  hundreds  of  millions  of  dollars,  are  now  closed,  and 
likely  so  to  remain  : 

That  the  power  to  diversify  the  employments  of  society  declines 
from  day  to  day  : 

That,  simultaneously  therewith,  we  add  to  our  population  a 
million  of  persons  annually  : 

That,  the  necessity  for  resorting  to  the  labors  of  the  field,  as 
affording  the  only  means  of  support,  steadily  increases : 

That  the  supply  of  food  tends,  therefore,  to  augment,  as  the 
domestic  consumption  declines : 

That  its  price  tends,  therefore,  steadily  to  fall,  and  is  likely  now 
to  be  lower  than  has  ever  yet  been  known  : 

That  the  farmer,  thus  deprived  of  the  ability  to  develop  the 
powers  of  his  land,  is  more  and  more  forced  to  limit  himself  to 


PRESIDENT  OF  THE   UNITED   STATES.  167 

the  work  of  robbing  the  earth  of  its  soil,  to  be  sold  in  distant 
markets : 

That  the  competition  thus  produced,  for  the  sale  of  food,  is 
most  injurious  to  the  farmers  of  Continental  Europe  : 

That  the  latter  are  thus  deprived  of  the  power  to  purchase  cotton, 
the  price  of  which,  with  favorable  seasons,  is  likely  to  fall  to  a 
lower  point  than  has  ever  yet  been  reached  : 

That  the  rewards  of  agricultural  labor  must,  therefore,  steadily 
decrease,  as  the  necessity  -for  resorting  to  the  labors  of  the  field 
increases : 

That  with  every  step  in  this  direction,  both  farmer  and  planter 
become  more  entirely  dependent  upon  the  mysterious  changes  of 
foreign  markets — prices  rising,  or  falling,  as  consequences  of  acts 
over  which  they  can  have  no  control  whatsoever  : 

That  under  such  circumstances,  agriculture  must  become,  with 
each  successive  year,  more  gambling  in  its  character  : 

That  the  rewards  of  productive  industry  must  diminish,  as  the 
temptation  to  engage  in  gambling  and  speculation  becomes  greater, 
from  year  to  year. 

That  the  proportion  of  the  population  acting  as  middlemen,  in 
the  various  capacities  of  trader  and  transporter,  lawyer  and  poll 
tician,  office-hunter  and  office-holder,  must  continue  to  increase: 

That  the  taxes  of  the  trader  and  transporter  must  steadily  aug- 
ment, as  the  powers  of  the  land  decline  : 

That  as  that  taxation  grows,  the  necessity  for  further  dispersion 
of  the  population,  with  growing  necessity  for  further  roads,  must 
steadily  increase : 

That,  the  greater  the  dependence  on  roads  and  ships,  the  less 
must  be  the  power  to  command  the  use  of  efficient  ships  and  roads : 

That  the  dependence  of  the  farmer  and  the  planter  upon  the 
city  trader,  and  that  of  the  country  at  large  upon  the  bankers  of 
Europe,  must  become  greater  from  year  to  year : 

That  the  power  of  commanding  the  services  of  the  precious 
metals  must  steadily  diminish  :  , 

That  commerce  at  home  must  decline,  as  the  dependence  on 
foreign  markets  increases : 

That  growing  dependence  upon  the  trader,  and  constantly  in- 
creasing instability  in  the  societary  action,  must  be  attended  by 
constant  diminution  in  the  feeling  of  responsibility,  and  as  con- 
stant increase  in  the  (demoralization  that,  with  each  successive  day, 
becomes  more  clearly  manifest : 

That  the  waste  of  power,  now  so  great,  must  steadily  increase, 
with  constant  decline  in  the  ability  to  produce  the  commodities 
required  for  consumption : 

That  the  ability  to  maintain  the  local  institutions  must  continue 
to  diminish,  and  the  necessity  for  further  additions  to  our  terri- 
tory must  as  regularly  increase  : 

That  the  expenditure  of  the  Federal  government  must  be  a  con- 


168  LETTERS  TO   THE 

stantly  augmenting  quantity — the  needs  of  the  Treasury  growing 
as  the  powers  of  the  people  decline  : 

That  bankruptcy  of  the  state  must  follow,  as  a  necessary  con- 
sequence : 

That  constantly  growing  discord  among  the  States  must  ulti- 
mately annihilate  all  confidence  in,  and  all  desire  for,  the  main- 
tenance of  the  Union :  and 

That,  with  each  successive  year,  it  must  become  more  obvious, 
that  the  day  is  fast  approaching,  when  "  the  republics  of  Greece, 
Rome,  and  America,  are  to  stand  together  among  the  ruins  of  the 
past." 

Such,  Mr.  President,  has  been  the  tendency  of  affairs,  for  the 
quarter- century  that  has  elapsed,  since  the  Federal  government 
undertook  the  management  of  the  currency  —  the  only  difference 
between  the  picture  here  presented,  and  that  required  for  presen- 
tation of  the  period  from  '3*7  to  '42,  being,  that  the  shades  de- 
manded by  the  present,  are  far  deeper  than  those  needed  for  the 
past.  Then,  centralization  had  but  just  begun  to  show  itself.  Now, 
it  is  fast  becoming  universal.  Till  then,  the  right  of  the  States 
to  control  their  local  institutions,  had  scarcely  at  all  been  ques- 
tioned. Now,  the  central  power  controls  the  municipal  elections, 
and  menaces  with  extinction,  the  local  rights.  More  progress 
having  been  made,  in  this  direction,  under  your  immediate  pre- 
decessor, than  had  been  made  in  the  preceding  five-and-twenty 
years,  that  of  each  successive  year  is  likely,  should  our  present 
policy  be  maintained,  to  be  greater  than  that  of  the  five  years 
through  which  we  last  have  passed  —  the  progress  of  man,  in 
whatsoever  direction,  good  or  bad,  being  one  of  constant  acce- 
leration. 

Why,  Mr.  President,  should  such  things  be  ?  Why  is  it,  that 
when,  as  you  have  told  us,  "the  earth  has  yielded  her  fruits  abun- 
dantly, and  has  bountifully  rewarded  the  labors  of  the  husbandman" 
—  when  "our  great  staples  have  commanded  high  prices,"  and 
when  we  "have  possessed  all  the  elements  of  material  wealth  in 
rich  abundance"  —  that  our  "monetary  interests"  are  in  the 
"deplorable  condition" you  have  so  well  described  ?  "Why  is  it, 
that  "in  the  midst  of  unsurpassed  plenty  in  all  the  productions 
of  agriculture  and  in  all  the  elements  of  national  wealth,  we  find 
our  manufactures  suspended,  our  public  works  retarded,  our 
private  enterprises  of  different  kinds  abandoned,  and  thousands 
of  useful  laborers  thrown  out  of  employment,  and  reduced  to  want  ?" 
Why  is  it,  that  "the  revenue  of  the  government,  which  is  chiefly 
derived  from  duties  on  imports  from  abroad,  has  been  greatly 
reduced,  whilst  the  appropriations  made  by  Congress  at  its  last 
session  for  the  current  fiscal  year  are  very  large  in  amount  ?" 

Seeking  a  reply  to  these  questions,  we  are  met,  at  once,  by  the 
fact,  that  they  are  precisely  those  which  were  asked  in  '22  and  '42, 
•,he  former  free-trade  periods ;  but  directly  the  reverse  of  those  which 


PRESIDENT   OF  THE   UNITED   STATES.  169 

might  have  been  asked  in  1817,  in  1835,  and  in  184T,  the  closing 
years  of  the  three  periods  in  which  it  had  been  held,  that  it  was 
among  the  duties  of  a  government  to  protect  its  people,  and  that 
when  it  failed  to  do  so,  they  would  be  governed  from  abroad  — 
the  home  government  being  superseded  by  a  foreign  one,  as  is  now 
so  much  the  case. 

Seeking  abroad  a  further  answer,  we  find  the  people  of  France 
profiting  largely  by  increase  in  the  value  of  the  products  of  the 
land,  and  of  the  land  itself.  Turning  towards  Denmark  and  Ger- 
many, we  find  the  serfs  of  the  last  century  to  have  been  replaced 
by  hundreds  of  thousands  of  small  proprietors.  Looking  to 
Russia,  we  are  met  by  decrees,  in  virtue  of  which,  serfdom  has 
already  ceased  throughout  a  large  portion  of  the  empire,  and 
must  speedily  cease  in  all.  In  all  of  these,  the  State  becomes 
stronger  and  more  self-dependent,  from  year  to  year;  whereas, 
with  us,  it  becomes  weaker  and  more  dependent. 

Why  should  there  be  such  differences  ?  Because,  the  policy  of 
all  those  countries  tends  towards  the  promotion  of  domestic  com- 
merce, and  towards  the  substitution  of  the  power  of  the  govern- 
ment for  that  of  the  traders  and  transporters — the  former  find- 
ing its  strength  increase  with  the  growing  wealth  and  power  of 
the  people,  and  the  latter  rejoicing  in  their  poverty  and  weakness. 
We,  on  the  contrary,  are  gradually,  but  certainly,  transferring  the 
powers  of  the  government  to  the  hands  of  those  who  profit  by 
trade  and  transportation,  and  who,  therefore,  rejoice  in  destroying 
the  power  of  association  and  combination.  Hence  it  is,  Mr.  Pre- 
sident, that  we,  who  claim  to  be  the  especial  friends  of  freedom, 
are  constantly  seeking  the  extension  of  slavery,  while  the  despots 
of  Europe  are  as  constantly  engaged  in  striking  the  chains  from 
their  subjects'  limbs. 

What  we  need  is,  the  adoption  of  measures  tending  towards 
limitation  of  the  power  of  taxation  exercised  by  foreign  and 
domestic  traders  and  transporters,  by  which  the  value  of  land  and 
labor  is  now  destroyed.  Such  was  the  tendency  of  the  act  of 
August,  1842,  which  came  into  existence  when  commerce  had 
almost  ceased,  when  bankruptcy  was  almost  universal,  and  when 
confidence  in  man,  in  banks,  in  States,  and  in  the  Federal  Treasury, 
had  nearly  perished.  Scarcely  had  it  become  a  law,  when  com- 
merce once  more  started  into  life,  confidence  was  restored,  and 
hope  in  the  future  was  found  taking  the  place  of  the  despair,  that 
previously  had  been  so  nearly  universal.  Why  was  this  ?  Because 
it  had  for  its  objects, the  diversification  of  the  demands  for  labor, 
the  facilitation  of  combination,  the  extension  of  commerce,  and 
the  economizing  of  human  power.  It  gave  us,  Mr.  President, 
that  sort  of  free  trade,  that,  as  you  have  clearly  seen,  we  so  greatly 
need  —  freedom  of  intercourse  between  man  and  man,  town  and 
town,  county  and  city,  State  and  State.  That  commerce  we  now 
have  not,  nor  can  we  have  it,  while  the  policy  of  the  Federal 


170  LKTTKRS    TO    THE 

government  shall  continue  to  be  in  accordance  with  the  desires  of 
the  people  who  seek  to  have  raw  materials  cheap,  and  finished 
commodities  dear,  and  find,  in  enormous  capitals,  the  most  useful 
of  all  the  instruments  of  warfare  required  for  depriving  the  nations 
of  the  world,  of  all  power  for  maintaining  direct  intercourse  with 
each  other. 

Restore  the  act  of  1842,  Mr.  President,  and  a  demand  for 
labor  will  arise  —  relieving  us  of  all  further  necessity  for  perusing 
the  shocking  accounts  of  poverty,  despair,  crime,  and  death,  with 
which  our  journals  are  now  filled.  Let  it  be  restored,  and  mills 
and  furnaces  will  at  once  be  re-opened  —  making  demand  for 
labor,  food,  and  raw  materials,  and  checking  decline  in  the  prices 
of  corn  and  cotton.  Let  it  be  restored,  and  your  second  Message 
will  present  a  picture  of  prosperity  among  the  people,  and  strength 
in  the  State,  directly  the  reverse  of  the  exhibit  of  poverty  in  the 
one,  and  weakness  in  the  other,  offered  by  your  first. 

Why  can  it  not  be  restored  ?  Because  the  generally  dominant 
party  —  failing  to  see  that  the  sort  of  free  trade  we  really  needed, 
was  the  one  you  have  yourself  so  well  described  —  has,  for  more 
than  twenty  years,  repudiated  the  ideas  of  our  revolutionary  fathers, 
and  of  all  our  presidents  from  Washington  to  Jackson  ;  and, 
having  done  so,  must  now  repudiate  all  change.  That  it  may 
maintain  its  consistency,  it  is  required  that  we  continue  to  pursue 
a  policy  that  has  been  repudiated  by  all  the  advancing  nations  of 
Europe,  and  that  has,  wherever  tried,  here  or  elsewhere,  resulted 
in  bankruptcy  and  ruin.  That  it  may  be  maintained,  we  must 
continue  to  exhaust  our  land  ;  we  must  continue  to  pay  a  tax  of 
transportation,  greater  than  would  be  required  for  maintaining 
millions  of  men  in  arms ;  we  must  continue  to  waste  capital  capa- 
ble, if  properly  applied,  of  more  than  doubling  our  productive 
power ;  we  must  continue  to  see  our  people  perish,  in  default  of 
power  to  find  purchasers  for  their  labor ;  we  must  continue  to  see 
capital  acquire  power  at  the  cost  of  labor;  we  must  continue 
and  extend,  the  necessity  for  seeking  public  employments ;  we  must 
continue  to  enlarge  our  territory,  and  with  it,  the  necessity  for 
fleets  and  armies  ;  we  must  continue  to  augment  the  power  of  the 
central  authorities,  at  the  cost  of  the  local  ones ;  and  finally,  we 
must  proceed  onward  in  a  course  leading,  and  that  inevitably,  to 
the  downfall  of  the  system  established  by  the  men  who  achieved  the 
Revolution,  and  who  made  the  Constitution  of  1789. 

Those,  Mr.  President,  who  advocate  further  progress  in  that 
direction,  can  have  little  idea  of  the  terrific  responsibility  that 
attaches  itself  to  the  administration  of  the  affairs  of  nations. 
If  it  is  a  crime  to  take  the  life  of  a  single  man,  what  must  it 
be,  to  subject  millions  of  people  to  a  policy  leading  inevitably  to 
poverty,  despair,  and  death?  —  If  seduction  is  a  crime,  what,  Mr. 
President,  is  the  criminality  of  those  who,  for  party  purposes,  ad- 
rocate  the  maintenance  of  a  system  which,  by  destroying  the 


PRESIDENT   OF   THE   UNITED   STATES.  171 

• 

demand  for  female  labor,  leaves  to  tens,  even  if  not  hundreds,  of 
thousands  of  our  women,  no  choice  but  that  between  prostitution 
on  the  one  hand,  and  starvation  on  the  other  ? 

It  is  time,  that  those  charged  with  the  administration  of  our 
affairs,  should  waken  to  the  knowledge,  that  protection  to  the  people 
is,  in  fact,  protection  to  the  government  itself.  The  policy  which 
transfers  to  foreign  merchants  and  foreign  States,  the  power  of 
taxation,  must  result  in  bankruptcy  of  the  treasury,  ruin  of  the 
people,  and  downfall  of  the  government.  So  it  has  always  been, 
and  so  must  it  ever  be. 

The  rock  upon  which  our  ship  is  likely,  Mr.  President,  to  be 
wrecked,  is  that  of  trading  and  political  centralization — the  last 
a  necessary  consequence  of  the  first.  The  more  the  policy  of  the 
country  tends  towards  augmentation  of  the  tax  of  transportation, 
the  more  rapid  becomes  the  motion  of  our  ship  in  the  wrong 
direction,  and  the  nearer  approaches  the  day  of  wreck.  You,  Mr. 
President,  are  our  pilot,  and  if  we  are  to  avoid  the  rocks,  it  is 
for  you  to  change  the  direction  of  the  helm.  If  that  be  not  done, 
the  story  of  our  Union  will  stand  before  posterity,  as  presenting 
the  most  remarkable  case  of  shipwreck  recorded  in  the  annals  of 
the  world. 

Hoping,  that  under  your  pilotage,  the  course  may  be  changed, 
and  that  the  period  of  your  administration  may  stand  upon  the 
record,  as  the  one  in  which  the  policy  of  fostering  domestic  com- 
merce as  the  true  foundation  of  an  extended  intercourse  with 
foreign  nations,  had  been  definitively  adopted,  I  remain,  Mr.  Pre- 
sident, with  many  apologies  for  my  repeated  trespasses  upon  your 
time  and  attention, 

With  great  respect, 

Your  obed't  servant, 

HENRY  C.  CAREY. 

Philadelphia,  March 17 th,  1858. 


THE    END. 


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